State-by-State Breakdown of Economic Nexus

The U.S. Supreme Court ruling in June of 2018 regarding sales tax nexus standards created a new source of significant revenue for 45 states. We cautioned at that time that states would take advantage of this opportunity quickly. Indeed, many states have already adopted new sales tax nexus standards, most using South Dakota’s threshold of $100,000 in sales or 200 transactions.

However, Texas and New York recently adopted sales tax nexus standards (Texas’ to begin 10/1/19 and New York’s was effective immediately) that use different thresholds.

Below is a listing of states with their sales tax nexus standards. We will update this list as new states issue guidance. It is also available as a printable PDF by clicking the PDF icon at the top left of this article.

Our advice to readers in June remains the same and is underscored by the mix of thresholds and effective dates you’ll see in the table. It is still important that you:

• Understand each state’s sales tax laws (now, and as they are enforced, updated or changed over the coming months).
  • This will include the thresholds at which businesses must comply with each state’s sales tax laws.
• Develop a strategy and plan to register, collect and report in accordance with state laws where necessary. Noncompliance is costly and increasingly possible with the challenge of differing laws among states.
• Evaluate all options for compliance processes and reporting, and develop a process to implement these changes as quickly and efficiently as possible without interrupting the normal course of business.

Smith and Howard’s sales and use tax team can help; our knowledge of state sales tax laws and constant monitoring of emerging laws over the coming months will offer a tremendous advantage to your business.

Our technology consultants are an important part of our overall sales and use tax team and can tailor an automated solution to assist in calculation and remittance functions designed with your business in mind.

Please use the contact form below to schedule your review and/or to see how our Sales and Use Tax Team can work with your business to get and keep you in compliance as the sales tax landscape changes. Our initial consultations are always completed free of charge.

*Update on effective/enforcement date still to be provided or legislation still needs to be adopted.

**Sellers can elect to either collect and remit sales tax or comply with notice and reporting requirements.

***Legislation effective 1/1/19; enforcement effective 10/1/19