States Requiring Remote Sellers to Begin Collecting Sales Tax, Even Before the U.S. Supreme Court Makes Ruling

Multi-State – The US Supreme Court will soon decide whether companies with no physical presence in South Dakota will be required to collect sales tax on sales in that state.  South Dakota recently passed a law that requires that remote sellers, even with no presence in the state, must collect sales tax.  That law is being challenged by the 3rd party sellers claiming that they are not responsible for the collection of sales taxes in that state.

In some states the revenue departments are making provisions as if the law has already been passed by the US Supreme Court.  Some states have already starting asserting tax liabilities to out of state companies.  Several states have enforced notice and reporting laws that require out of state sellers to provide the names of customers or to collect sales taxes.  Other states are requiring sales tax collection for companies with a website selling to residents in that state once they reach a certain amount of sales. Certain states have what they labeled a “click through nexus” law that requires that sales tax is collected by any company that has an agreement with any independent contractor or websites to sell their products. Out of state sellers are now being required to collect sales tax by enacted laws in 31 states.

Once the U.S. Supreme Court makes a ruling in July of 2018.  If the US Supreme Court decides on the side of South Dakota, all 45 states that collect sales taxes will likely also begin requiring remote seller to also begin collecting tax for such sales.

About Davis Davis & Harmon LLC – Sales Tax Experts: Headquartered in Dallas, Texas, Davis Davis & Harmon LLC – Sales Tax Experts (DDH LLC) specializes in sales/use tax audit consulting and audit defense. Our team of consultants is comprised of former Big 4 sales tax consultants and state sales tax auditors. Each of our consultants has 15 to 20 years of experience, providing our clients with access to a highly specialized team of sales/use tax professionals. At DDH LLC we are committed to maintaining the highest standards in our talent pool. We work hard to meet our clients’ needs by ensuring that you view our firm as an extension of your company and a member of your team.

For sales/use tax compliance questions or audit-related concerns, we are here to help!

Contact us at Davis Davis & Harmon LLC or call 972-488-5000

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