On June 21st the US Supreme Court overturned its earlier precedents by issuing an opinion in the case of South Dakota vs Wayfair, which will now allow individual states to attempt to collect sales tax from out-of-state sellers, such as online and website sales. Since 1967, remote vendors without a physical presence in a state could not be forced to collect sales tax. In Wayfair, the Court upheld a South Dakota law that requires remote vendors to collect tax if they have either 200 transactions or sales exceeding $100,000 in the state in a year. Under the South Dakota law, no physical presence is required.
Many other states have subsequently started collecting sales tax from out-of-state sellers or have stated they will start collecting it soon. Each state’s laws and requirements can be different, but there were several factors the Supreme Court considered in its decision, including a safe harbor for businesses with transactions under a specific threshold, the law is not retroactive and South Dakota is a member of the Streamlined Sales and Use Tax Agreement, which reduces the administrative burden for compliance on businesses.
Please contact us if you believe your business may be affected by these new requirements or have any other questions.
Schutte & Hilgendorf offers a broad range of professional accounting, tax, and audit services to individuals and businesses throughout Yavapai County and Northern Arizona. With over 40 years combined certified public accounting experience, we specialize in providing services to numerous industry specific areas, including non-profit organizations, homeowner’s associations and construction contracting. We also provide tax planning and preparation, sales tax and payroll tax return preparation, ongoing accounting/bookkeeping, live payroll, and QuickBooks setup and training (QuickBooks Proadvisors). Given our small size, we can still provide a personal touch with professional expertise. Come in and see us anytime at 2086 Willow Creek Road, Prescott, Arizona or call us at 928-778-0079.