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States Follow South Dakota: A By-State Guide on Economic Nexus

author photo of Sylvia F. Dion

NOVEMBER 26, 2018 UPDATE: Since the original publication of this post (on Aug 10, 2018), several more states have adopted economic nexus for sales tax. The economic nexus chart below has been updated to show all states that have adopted economic nexus as of Nov 26, 2018 (a total of 33 states). You'll also find several new links and updates on enforcement dates and other developments. (If you've read my introductory commentary in the past, you can simply scroll down to view the updated chart.)

Original Post: If you caught my earlier post where I provide a recap of the U.S. Supreme Court’s decision in Wayfair, my predictions on the rapidly changing sales tax landscape and recent Congressional efforts to bring some uniformity to this chaos, you’re already aware that of August 1st more than 25 states have adopted an economic nexus standard for sales tax. While some states have adopted economic nexus through legislation, others have done so through updated/new regulations, and yet others through administrative policy - thus, excluding their legislatures from the policy making process and circumventing the formal regulation promulgation process.

I first blogged about economic nexus when states, such as South Dakota, decided it was time to blatantly challenge Quill by enacting economic nexus laws. When I wrote my prior post, “Economic Nexus: The ‘New Normal” or the Demise of Quill?,” I predicted these constitutionally questionable laws might lead to the demise of Quill and could indeed become the “new normal.” But now that this has occurred, I have to say it’s mind-boggling how rapidly the economic nexus train is charging along. States are reacting at warp speed! Yep, economic nexus IS the “new normal." Be aware that these economic nexus laws have implications not only for remote online retailers but for all types of businesses making remote sales into states in which they have no physical presence but meet the various states’ sales and/or transactions thresholds. To provide an overview on the rapidly evolving economic nexus rules, I've created an economic nexus chart that details each state's provisions (you'll find the full chart below).

Before launching into this economic nexus chart, here are a few important things to note. First, in most states, economic nexus is based on a sales OR transactions threshold - if either is met, economic nexus is triggered. Additionally, some states base their economic sales threshold on taxable sales, while others mention gross sales and other explicitly state that both taxable and exempt sales are to be considered in determining if the sales threshold has been exceeded. Also note that some states that have enacted economic nexus have done so as part of comprehensive legislation which also includes Notification & Reporting, Marketplace Facilitator or other provisions. Also, as you go through the chart, note that all footnotes referenced can be found at the bottom of the chart (you'll find more information in these footnotes). Finally, I’ve included numerous links throughout the chart – the legislation (bill number), state tax agency press releases, FAQs, updates, etc. My goal in creating this chart was to provide a solid, go-to resource for practitioners and businesses (I also plan is to update this same blog post as new developments occur - and on that note, I encourage you to bookmark this blog post webpage).

So without further a-do, following is a chart of the Economic Nexus states as of November 26, 2018

State and Enacting Legislation, Code, Regulation or Administrative Policy

Sales Threshold [FN1]

Transactions Threshold [FN2]

Effective Date

State Press Releases, Notices, Updates and Issue Date

Other Criteria and/or Additional Comments

Alabama

AL Reg 810-6-2-.90.03

Sales of TPP of more than $250,000 in prior calendar year

No transaction threshold - but other criteria must be met (see Comment)

Oct 1 2018 [FN3] prospective enforcement

AL DOR Press Release (7/3/2018), AL Simplified Seller's Use Tax FAQs

Seller must also engage in or conduct certain other activities in Alabama in addition to having more than $250,000 in sales. [FN4] Eligible remote sellers have option to apply and collect under Alabama's Simplified Seller's Use Tax program.

Colorado

Colo. Code Regs. 39-26-105(4)(a)(II)

Gross revenue from sales of TPP or services delivered into Colorado of more than $100,000 in prior or current calendar year

OR 200 or more separate transactions

Dec 1, 2018 prospective enforcement

CO DOR News Release "Colorado to require online retailers to collect sales tax" (9/11/2018), Information for Out-of-State Retailers webpage

The Colorado DOR has issued Emergency Regulation Sec. 39-26-204(2) "Retailer's Use Tax" (see pages 15-16) which follow the same threshold's as South Dakota's law. The Colorado DOR has not addressed how this will impact home rule cities.

Connecticut

S.B. 417

Retail sales of TPP of $250,000 more in 12-month period ending Sept 30, 2018

 

AND 200 or more separate retail sales in the year ending Sept 30, 2018 (other criteria must also be met – see Comment)

Dec 1 2018 prospective enforcement

CT Notice SN 2018(5), pages 2 -4 (6/26/2018)

In addition to meeting both the sales and transaction thresholds, seller must also regularly & systematically solicit sales via mail, telephone, computer, internet or other communication system. [FN5]

Georgia

H.B. 61

Ga. Code Ann. § 48-8-30 (c.2)(1)(A)(i)& (ii)

Retail sales of TPP of more than $250,000 in prior or current calendar year [FN6]

OR 200 or more separate retail sales of TPP

Jan 1 2019 prospective enforcement

GA DOR Policy Bulletin SUT-2018-07 (10/1/2018)

H.B. 61 also includes a Notification & Reporting provision. Per Bulletin SUT-2018-07, sellers who meet thresholds but fail to comply must comply with Notification & Reporting rules. Georgia is a full-member of the SSUTA [FN 27]

Hawaii

S.B. 2514

Gross income from sales of TPP, intangibles or services of $100,000 or more in prior or current calendar year

 

OR 200 or more separate transactions for the sale of goods, intangibles or services

July 1 2018 prospective enforcement

HI Department of Taxation Announcement 2018-10 - Amended (7/10/2018)

The original version of Announcement 2018-10 would have imposed retroactive application of the law. [FN7]

Illinois

H.B. 3342

Ill. Admin. Code 150.803(b)(1)(A)&(B)

Gross receipts from taxable sales of TPP of $100,000 or more in prior or current calendar year

 

OR 200 or more separate transactions

Oct 1 2018

IL Informational Bulletin FY 2019-05 "Use Tax Guide for Remote Sellers", IL Admin Code Sec 150.803 "Wayfair Nexus" [NEW]

Seller must determine at the end of each calendar quarter whether they exceeded either economic nexus thresholds in the prior 12-month period. Illinois explicitly excludes exempt sales in determining if economic thresholds are exceeded.

Indiana

H.B. 1129

Ind. Code § 6-2.5-2-1(c)(1)&(2)

Gross revenue from sales of TPP, electronically delivered goods, or services of more than $100,000 in prior or current calendar year [FN8]

 

OR 200 or more separate transactions

Oct 1 2018 [FN9] prospective enforcement

IN DOR webpage on SD v. Wayfair for FAQs and updates, IN Tax Revenue Bulletin (7/27/2018)

Indiana’s law uses the same economic thresholds as South Dakota’s law. Indiana is a full-member of the SSUTA [FN 27]

Iowa

S.F. 2417

Iowa Code § 423.14A(3)(a)&(b)

Gross revenues from sales of TPP or services of $100,000 or more in prior or current calendar year

OR 200 or more separate transactions

Jan 1 2019 prospective enforcement

See IA DOR Bulletin for more information

Iowa's law uses similar thresholds to South Dakota's law. S.F. 2417 also includes a Notification & Reporting provision. Iowa's law also includes a "cookie nexus", use of in-state software and use on in-state CDN provisions (IA Code Sec 423.14A(3)). Iowa is a full-member of the SSUTA [FN 27]

Kentucky

H.B. 487

Ky. Rev. Stat. Ann. § 139.340(2)(g)(1)&(2)

 

Sales of TPP or digital property of more than $100,000 in prior or current calendar year [FN10]

 

OR 200 or more separate transactions

Oct 1 2018 prospective enforcement

See this KY Notice re Wayfair decision and Oct 1st effective date (updated 7/30/2018), KY Remote Seller FAQ.

Kentucky’s law uses the same economic thresholds as South Dakota’s law. Kentucky is a full-member of the SSUTA [FN 27]

Louisiana

H.B. 17

La. Rev. Stat. Ann. § 47:301(4)(m)

Gross sales of TPP, digital products or services of more than $100,000 in prior or current calendar year

OR 200 or more separate transactions

Jan 1 2019 contingent date

 

LA DOR Remote Seller's Information Bulletin No. 18-001 (8/10/2018)

Louisiana’s law uses the same economic thresholds as South Dakota’s law. The Louisiana law also established the Louisiana Sales and Use Tax Commission for Remote Sellers.

Maine

L.D. 1405

Me. Rev. Stat. Ann. § 1951-B(3)(A)&(B)

Gross revenue from sales of TPP, digital products or services of more than $100,000 in prior or current calendar [FN11]

OR 200 or more separate transactions

July 1, 2018 [FN12] prospective enforcement

ME Revenue Services Wayfair webpage, Remote Sellers webpage and Tax Alert (Aug 2018)

Maines’ law uses the same economic thresholds as South Dakota’s law.

Maryland

Md. Regs. Code 03.06.01.33(B)(5)

Gross revenue from sales of TPP or taxable services of more than $100,000 in prior or current calendar year.

OR 200 or more separate transactions

Oct 1 2018 prospective enforcement

MD Sales & Use Tax Alert regarding Wayfair (July 2018), MD Sales & Use Tax Alert - Implications for Sales Tax Nexus (Sept 2018)

Maryland's emergency regulation uses the same economic thresholds as South Dakota's law.

Massachusetts

Reg. 830 CMR 64H.1.7

Sales into MA of $500,000 or more in prior or current taxable year [FN13]

 

AND 100 or more separate transactions

Oct 1 2017

MA DOR press release on Wayfair Decision (6/22/2018), MA Technical Information Release 18-8 (Sept 17, 2018)

In a 6/22/2018 press release, the Massachusetts DOR indicated that its economic nexus regulation continues to apply and is not impacted by the Wayfair decision. Also see TIR 18-8, Tax Jurisdiction Over Internet Vendors Prior to and Subsequent to Wayfair and Sept 28, 2018 Massachusetts blog post on this development.

Michigan

MI RAB 2018-6

 

Taxable or non-taxable sales into MI of more than $100,000 in prior or current calendar year

OR 200 or more separate transactions

Oct 1 2018 prospective enforcement

MI Notice to Remote Sellers Re: Sales Tax and Wayfair (revised Aug 9, 2018), MI Revenue Administrative Bulletin (RAB) 2018-6 (8/1/2018), Remote Sales Tax Collection in MI Due to SD v. Wayfair (8/13/2018) 

Michigan uses the same thresholds as South Dakota. Economic nexus adopted by administrative bulletin, not through enacted legislation. Michigan is a full-member of the SSUTA [FN 27]

Minnesota

H.F. 1

Minn. Stat. § 297A.66, Subd. 3(d)

Retail sales into MN of more than $100,000 in 10 or more transactions in any 12 consecutive month period.

OR 100 or more separate retail transactions

Oct 1 2018

See MN DOR Press Release (7/25/2018), Remote Seller Webpage (last updated 10/10/2018), Remote Seller FAQ (Last updated 7/16/2018),

Minnesota’s threshold includes both and “AND” and an “OR” threshold. [FN14] Minnesota is a full-member of the SSUTA [FN 27] On Sept 7, 2018, the Minnesota DOR issued an update that will require all sellers to collect in all MN local jurisdictions based the customer's location.

Mississippi

Rule 35.4.03.09

Miss. Administrative Code 35.IV.3.09 (100)

Sales into Mississippi of more than $250,000 in prior or current calendar year 

 

None - but other criteria must also be met (see Comment)

Sept 1 2018 [FN 15] prospective enforcement

See MS Sales and Use Tax Guidance for Online Sellers (updated 8/6/2018)

Sales for determining whether econoimi nexus threshold is met include retail, wholesale and exempt sales. In addition to meeting both the sales threshold, a remote seller must also “purposefully or systematically” exploit the Mississippi market.

Nebraska

No Regulation or Legislation – per Department Policy

 

Nebraska sales of more than $100,000

OR 200 or more separate transactions (other criteria must also be met)

Jan 1 2019 prospective enforcement

NE DOR Wayfair press release (7/7/2018), Wayfair Information webpage, and FAQs (7/27/2018)

Although physical presence no longer required, a remote seller must also be engaged in business in Nebraska as defined under Neb. Rev. Stat. § 77-2701.13. Nebraska is a full-member of the SSUTA [FN 27]

Nevada

Proposed Regulation LCB File No R189-18

Gross revenue from retail sales of TPP of more than $100,000 in prior or current calendar year

OR 200 or more separate transactions

Pending - however, Nevada has announced enforcement will be prospective

NV Dept of Taxation Remote Sellers-Wayfair Decision webpage, NV Notice of Regulation Hearing

The Nevada Depart of Taxation will hold a hearing on September 13, 2018 on the final adoption of the regulation. Nevada is a full-member of the SSUTA [FN 27]

New Jersey

Department of Treasury Sales & Use Tax Notice

N.J. Rev. Stat. § 54:32B-2(i)

Gross Revenue from sales of TPP, specified digital products, or services of more than $100,000 in prior or current calendar year

OR 200 or more separate transactions

Nov 1 2018 prospective enforcement

NJ Sales and Use Tax Information for Remote Sellers Notice (8/14/2018)

NJ Update on change in effective date to Nov 1 2018 (9/25/2018)

New Jersey is a full-member of the SSUTA [FN 27]

North Carolina

N.C. Directive # SD-18-6

 

Gross sales of $100,000 or more sourced to North Carolina in prior or current calendar year

OR 200 or more separate transactions

Nov 1 2018 prospective enforcement

NC DOR webpage announcing new directive (8/8/2018), NC Directive SD-18-6 (8/7/2018).

North Carolina’s directive uses same thresholds as South Dakota’s law. Economic nexus adopted by DOR policy statement, not through enacted legislation. North Carolina is a full-member of the SSUTA [FN 27]

North Dakota

SB 2298

N.D. Cent. Code § 57-39.2-02.2

Sales of TPP or other taxable items of $100,000 or more in prior or current calendar year

OR 200 or more separate transactions

Oct 1 2018 prospective enforcement

ND DOR webpage on Remote Seller Sales Tax, ND DOR press release announcing Oct 1 2018 enforcement date (7/11/2018)

North Dakotas’ law uses same thresholds as South Dakota’s law. Also see North Dakota Tax Commissioner statement on Wayfair decision. North Dakota is a full-member of the SSUTA [FN 27]

Ohio

H.B. 49 [FN16]

Gross receipts exceed of more than $500,000 in the prior or current calendar year (other criteria must be met - see Comment)

None - but other criteria must be met (see Comment)

Jan 1 2018

 

In addition to meeting the gross receipts threshold, a remote seller must use in-state software (including “cookies”) or a "CDN" [FN17] in Ohio to be subject to Ohio’s economic nexus law. Additionally, Ohio is a full-member of the SSUTA [FN 27]

Oklahoma

H.B. 1019

Sales of TPP of $10,000 or more during the preceding 12-month period (but see Comment - applies if seller opts not to comply with Notification & Reporting law)

None (see Comment)

Apr 10 2018

OK Tax Commission Remote Seller press release (8/31/2018), FAQs and Wayfair document

A remote seller that meets the $10,000 threshold must either register to collect or comply with the Oklahoma's notification & reporting law. [FN18] Oklahoma is a full-member of the SSUTA [FN 27]

Pennsylvania

H.B. 542

Sales of TPP of $10,000 or more during the prior 12- month period (but see Comment - applies if seller opts not to comply with Notification & Reporting law)

None (but see Comment)

Apr 1 2018

PA Remote Sellers webpage

Remote sellers [FN19] with aggregate sales of $10,000 or more in the prior 12-month period must elect to collect and remit PA sales tax or comply with the notice & reporting requirements.

Rhode Island

HB 5175

R.I. Gen. Laws § 44-18.2-3(A)

 

 

Gross revenue from the sale of TPP, software or taxable services of $100,000 or more [FN20]

 

OR 200 or more separate transactions

Aug 17 2017 retroactive enforcement

RI DOR Wayfair Statement (6/27/2018), Post-Wayfair Remote Seller FAQs (updated 7/20/2018), Tax Professional Advisory Bulletin 2018-24 re: Registration Options (6/27/2018), Tax Professional Advisory Bulletin 2018-29 re: Non-Collection Retailers, Remote Sellers (7/23/2018)

Non-collecting retailers must either register and collect and remit sales and use tax on all RI taxable sales or comply with notification & reporting provisions. [FN21] Rhode Island is a full-member of the SSUTA [FN 27]

South Carolina

SC Revenue Ruling 18-14, (09/18/2018)

Gross revenue from sales of TPP, electronically delivered goods, or services of more than $100,000 in prior or current calendar year.

None - but see comment (comprehensive definition of gross revenues)

Nov 1 2018

SC Rev Ruling 18-14, (09/18/2018), SC DOR Remote Sellers Webpage

SC Rev Ruling 18-14 indicates that gross revenues for determining whether economic nexus threshold is met includes taxable retail sales, wholesale sales, exempt sales, all sales of electronically delivered goods or services even if such goods or services are not subject to the SD sales or use tax and revenues from all channels on which the remote seller makes sales to SC consumers (e.g., own website, marketplace, etc).

South Dakota

S.B. 106 (2016)

SD CL 10-64

Sales of TPP or services of more than $100,000 in prior or current calendar

 

OR 200 or more separate transactions

Pending (Nov 1 2018) [FN22] prospective enforcement

SD Governor Daugaard's press release on Wayfair decision (6/21/2018), SD DOR webpage for remote sellers, SD DOR Remote Seller Bulletin (Sept 2018), Press Release re Remote Sellers and Marketplace Providers (9/12/2018) 

The first state in the country to enact economic nexus for sales tax, the law in question in South Dakota v. Wayfair. Although the U.S. Supreme Court ruled in favor of South Dakota, the state was prohibited from immediately enforcing its law. However, on Sept 12 2018, the SD legislature passed two bills impacting remote sellers and marketplace providers (SD CL 10-64 and SD CL 10-65) [see FN22] South Dakota is a full-member of the SSUTA [FN 27]

Tennessee

Rule 1320-06-01-.129 (Rule 129)

Sales of TPP or services of more than $500,000 during any calendar year

None, but other criteria must be met (see Comment)

Pending [FN23]

TN DOR Sales and Use Tax Notice No. 18-11 (8/1/2018)

Seller must also engage in regular or systematic solicitation of TN consumers through any means in addition to having more than $500K in sales. Tennessee is an associate member of the SSUTA [FN 27]

Utah,

S.B. 2001

Utah Code Ann. § 59-12-107(2)(c)

Sales of TPP, electronically transferred products or services of more than $100,000 in prior or current calendar year.

OR 200 or more separate transactions

Jan 1 2019 prospective enforcement

UT State Tax Commission Current News webpage

Utah’s law uses the same economic thresholds as South Dakota’s law. Utah is a full-member of the SSUTA [FN 27]

Vermont

H.B. 873

Vt. Stat. Ann. § 9701(9)(F)

Sales of $100,000 or more in prior 12-month period

OR 200 or more separate transactions (but other criteria must also be met – see Comment)

July 1 2018 [FN24] prospective enforcement

VT Dept of Taxes Wayfair webpage.

Seller must also engage in regular, systematic, or seasonal solicitation of sales of TPP (including via internet, etc.) in addition to meeting one of the economic thresholds. Vermont is a full-member of the SSUTA [FN 27]

Washington

H.B. 2163

Threshold One: Retail sales of TPP of $100,000 or more during the prior 12- month period [FN25]

Threshold Two: Retail sales of TPP of $10,000 or more during the prior 12- month period

Threshold One: 200 or more separate transaction [FN25]

Threshold Two: No transaction threshold under Threshold Two

Oct 1 2018 (Threshold One) [FN25]

Jan 1 2018 (Threshold Two)

WA DOR Marketplace Fairness webpage [FN25]

In August 2018, the Washington DOR updated its Marketplace Fairness webpage and added a NEW set of economic nexus thresholds that become effective on Oct 1, 2018. Therefore, there are now two separate sets of economic nexus thresholds that apply in Washington. See [FN25] for a detailed explanation. Washington is a full-member of the SSUTA [FN 27]

West Virginia

WV Admin Notice No. 2018-18

Sales of good or services delivered into WV of more than $100,000 during the 2018 calendar year 

OR 200 or more separate transactions

Jan 1 2019

WV Admin Notice No. 2018-18 (10/01/2018)

WV Administrative Notice No. 2018-18 does not clarify whether "sales" includes all sales or only retail/taxable sales. It is anticipated WV will issue more guidance as the enforcement date approaches. West Virginia is a full-member of the SSUTA [FN 27]

Wisconsin

Regulation adopted (cite below), initially announced via WI DOR Notice

Wis. Admin. Code Tax 11.97(4)(a)(1)&(2)

 

Sales of more than $100,000 in prior or current calendar

 

OR 200 or more separate transactions

Oct 1 2018 prospective enforcement

WI DOR press release (7/5/2018), webpage on Remote Sellers and Wayfair, and FAQ (7/5/2018)

On July 5 2018, the WI DOR announced it would be issuing a rule (regulation) that would be consistent with the U.S. Supreme Court’s decision in South Dakota v. Wayfair. Wisconsin is a full-member of the SSUTA [FN 27]

Wyoming

H.B. 119

Wyo. Stat. § 39-15-501(a)(i)&(ii)

Gross revenue from sales of TPP, admissions or services of more than $100,000 in prior or current year.

OR 200 or more separate transactions

Pending [FN26] prospective enforcement

WY DOR Wayfair statement (downloads from this webpage), WY DOR Remote Seller Bulletin (8/7/2018).

Wyoming’s law uses the same economic thresholds as South Dakota’s law. Wyoming is a full-member of the SSUTA [FN 27]

 

[1] IMPORTANT REGARDING SALES THRESHOLDS: When reviewing this chart, note that in some states the sales threshold is the specified sales amount OR MORE (e.g., CT, GA); while in others it is MORE THAN the specified sales amount (e.g., AL). Also, note that in many states, the law makes no distinction between taxable and non-taxable sales. Therefore, an out-of-state seller whose sales into an economic nexus state are largely exempt sales (such as “sales for resale”) may still exceed the sales or transaction thresholds even if many of their sales would not be subject to sales tax.

[2] IMPORTANT REGARDING TRANSACTIONS THRESHOLDS: Note that in many states, if EITHER of the thresholds is met, the seller would have economic nexus (most of the states above follow this "OR" approach). But in other states, BOTH thresholds must be met for the seller to be subject to the state’s economic nexus law (e.g., CT, MA).

[3] Alabama’s economic nexus regulation had an original effective date of Jan 1, 2016, however the regulation could not be enforced until Wayfair was decided. On July 3, 2018, the Alabama DOR announced its regulation would become effective on Oct 1, 2018 (press release to Alabama’s notice is linked in the chart above). The Alabama Notice also indicates that remote sellers who can demonstrate that a marketplace facilitator is collecting and remitting Simplified Seller’s Use Tax (SSUT) or sales tax on their Alabama sales will be relieved of complying with the remote seller requirements. On July 20, 2018, Alabama issued a NEW regulation (AL Reg. 810-6-2-.90.04 – Requirements for Certain Marketplace Facilitators and Marketplace Sellers).

[4] An out-of-state seller must also engage in or conduct one of more of the activities in addition to exceeding the sales threshold: (1) occupying, using a facility directly or indirectly (though sub or agent); (2) employing and/ or engaging a sales rep, agent, solicitor, installer; (3) engaging in substantial & recurring solicitation of orders for tangible personal property if the seller benefits from banking, financing, debt collection, telecommunication or marketing activities in Alabama or from authorized installation, servicing or repair facilities located in Alabama.

[5] Connecticut S.B. 417 is a very comprehensive bill which also includes a related party, marketplace facilitator and notification & reporting provision.

[6] Georgia’s law applies to goods delivered both physically (e.g., product shipped via common carrier into the state) or delivered electronically (e.g., software, e-books)

[7] The amended Announcement overrides Hawaii's initial Announcement (issued 6/27/2018) which said some taxpayers might owe the Hawaii General Excise Tax for the first six months of 2018. The Hawaii tax is not an actual sales tax, it is a General Excise Tax (GET) imposed on essentially all goods and services. However, it functions like a sales tax as sellers are able to collect the GET from consumers.

[8] Indiana’s law applies to goods delivered both physically (e.g., product shipped via common carrier into the state) or electronically (e.g., software, e-books)

[9] Although the original effective date of Indiana’s law was July 1, 2017, on July 27, 2018, the Indiana DOR issued an Indiana Revenue Tax Bulletin noting that the IN DOR will start to enforce its economic nexus law prospectively on October 1, 2018.

[10] Includes digital property delivered or transferred electronically.

[11] Maine’s law applies to goods delivered both physically (e.g., product shipped via common carrier into the state) or electronically/digitally (e.g., software, e-books) and taxable services.

[12] Although the original effective date of Maine’s law was Oct 1, 2017, Maine Revenue Services has stated on a newly posted webpage, that its law will be "enforced for sales occurring on or after July 1, 2018, the first monthly filing period after the date of the Wayfair decision."

[13] Also see our article at SalesTaxSupport.com, "Massachusetts Expands Sales Tax Nexus Policy for Internet Vendors" for a more in-depth discussion of Massachusetts' economic nexus policy. Also, in early 2018, Amazon turned over specific, identifying information to the Massachusetts DOR in response to a valid and binding legal demand from the Massachusetts DOR. See our article at SalesTaxSupport.com: “Amazon Exposes FBA Sellers in Massachusetts: 5 Key Considerations” for more on this development. Also see our 9/28/2018 article "Massachusetts' Economic Nexus Reg to be Enforced Retroactively" on TIR 18-8.

[14] Minnesota’s “small seller exception” is unique in that it includes both an “AND” and an “OR” transactions requirement. If the sales threshold of more than $100,000 in retail sales is met, those sales must have been completed in 10 or retail transactions (this is the “AND” requirement). Thus, as an example, a remote seller who makes 5 Minnesota retail sales in a consecutive 12-month period which total more than $100K would not be subject to the economic nexus. Separate from the sales threshold, a remote seller who makes 100 or more retail sales into Minnesota would also economic nexus regardless of whether they met the sales threshold (this is the “OR” requirement).

[15] Even though Mississippi's economic nexus rule had an original effective date of Dec 1, 2017, on August 6, 2018, the Mississippi DOR updated administrative notice 35.4.03.09, "Sales and Use Tax Guidance for Online Sellers." In this notice, the DOR indicated it was not actively enforcing its rule prior to the Supreme Court’s Wayfair decision and that DOR will allow online sellers to begin collection of Mississippi use tax for sales made on or after September 1, 2018 when such sellers register to collect Mississippi tax by August 31, 2018.

[16] Ohio H.B. 49 is a very comprehensive bill. The economic nexus provisions can be found at pages 2,305 – 2,307.

[17] A CDN is a “content delivery network” such as a system of distributed services that delivers web sites and other web content to Ohio users.

[18] Several states have enacted laws which give the out-of-state seller (that exceeds the sales threshold) a choice of either registering to collect, report and remit sales tax OR comply with the state’s notification & reporting provision. Even though the notification & reporting provisions do not require an on-out-state seller to register and remit sales tax, the notification & reporting laws impose added burdens on the out-of-state seller making it almost easier for the seller to register, collect and remit.

[19] Pennsylvania’s law also applies to marketplace facilitators and “referrers.” Effective April 1, 2018, Amazon began collecting, remitting and reporting Pennsylvania sales tax on behalf of its third-party sellers in order for Amazon to comply with Pennsylvania’s new marketplace facilitator law.

[20] Applies to pre-written software delivered via electronically or by load and leave.

[21] Rhode Island’s law is a very comprehensive bill which includes economic, affiliate, click-through, warehouse, and marketplace provider nexus provisions.

[22] Maine’s law applies to goods delivered both physically (e.g., product shipped via common carrier into the state) or delivered electronically/digitally (e.g., software, e-books) and taxable services

[22] South Dakota’s law had an original effective date of May 1, 2016; however, the South Dakota DOR has been precluded from enforcing its law due to the Wayfair litigation. Even though the U.S. Supreme Court ruled in favor of South Dakota, the injunction (against enforcement) that was placed on the law by a South Dakota Circuit Court is still in place which means the South Dakota law cannot be enforced until the injunction is lifted. On August 7th, Gov Daugaard issued a press release announcing a Special Legislative Session which will be held on Sept 12, 2013 to address an implementation date. On August 9th, the South Dakota Supreme Court remanded Wayfair back to the Circuit Court for further proceedings and/or to dissolve the injunction. On August 27th, the South Dakota legislature introduced two new bills to be addressed during the Sept 12th Special Session. SB 1, would remove the injunction for all sellers (except for Wayfair, Overstock and NewEgg - the three defendants in South Dakota v. Wayfair), sets an enforcement date of Nov 1, 2018. SB 2 would add a NEW Marketplace Facilitator provision which would impose registration, collection and remittance obligations on certain marketplace facilitators (e.g., Amazon), which would be effective March 1, 2019. On Sept 12, 2018, the South Dakota legislature passed two bills impacting remote sellers and marketplace providers (SD CL 10-64 and SD CL 10-65), establishing a Nov 1, 2018 enforcement date for the remote seller provisions and a March 1, 2019 enforcement date for marketplace facilitator provisions.

[23] Tennessee’s law was originally effective on July 1, 2017; however, the Tennessee DOR cannot enforce its law due to litigation and until the Wayfair decision was decided.

[24] Vermont’s law was originally enacted in 2016 and had a contingent effective date which would be the later of July 1, 2017 or the date the physical presence requirement in Quill was abolished. The Vermont Department of Taxes has announced in its Wayfair webpage that its economic nexus provisions became effective July 1, 2018 and out-of-state vendors who meet either economic nexus threshold should register for a Vermont sales tax license.

[25] In August 2018, the Washington DOR updated its Marketplace Fairness webpage and added a NEW set of economic thresholds that become effective on Oct 1, 2018. Under these NEW guidelines (which Washington refers to as "Threshold One"), a remote seller making either $100,000 or more in sales to or 200 transactions with Washington purchasers must register their business and collect/submit retail sales/use tax on those sales. Threshold One only applies to remote sellers and includes remote sellers whose Washington sales are made through a marketplace facilitator. Under "Threshold Two", which are the original economic nexus guidelines enacted as part of H.B. 2163 and which went into effect on Jan 1, 2018, remote sellers and marketplace facilitators with aggregate retail sales of $10,000 or more in the prior 12-month period must either collect and remit WA sales tax or comply with notice and reporting requirements.

[26] Wyoming’s law had an original effective date of July 1, 2017 however, due to pending litigation, the Wyoming law cannot yet be enforced.

[27] States which are full Streamline Sales Tax States must comply with the SSUTA's simplification and other requisites.

*****************

  • If you're a foreign (non-U.S.) seller, please see my new post published "Wayfair & Economic Nexus for Foreign Sellers: Key Sales Tax Questions" which includes Questions and Answers written specifically to address the concerns and questions many foreign sellers may have. The post is written in an FAQ format and contains helpful guidance not only for foreign sellers, but U.S. sellers as well.
  • I'll be updating this blog post as updates occur - please consider bookmarking this blog post webpage for easy reference.
  • As noted above and in the footnotes to the chart, many states have enacted legislation which includes Notification & Reporting, Marketplace Facilitator and other provisions. I'll be continuing this series with additional blog articles and more charts which focus on these additional provisions as well as blog posts on what impacted sellers need to consider in this "new era."
  • Finally, if you have questions, please feel free to post a comment below. And, if you're uncertain as to how economic nexus impacts your business, please feel free to contact me via the link in my Author's Box below, via the "Consultation Request" box below, or via my firm's webpage here at SalesTaxSupport.com.

About the Author: Sylvia Dion is the Founder and Managing Partner of PrietoDion Consulting Partners LLC, a SALT advisory firm which provides SALT services to businesses in the U.S. and throughout Europe, Canada, Latin American and Australia. Since 2011 Sylvia has served as a contributor to the SalesTaxSupport blogs and currently blogs on Internet Sales Tax, U.S. Sales Tax for Foreign Sellers, and Massachusetts Sales Tax. Sylvia has written articles for State Tax Notes, Bloomberg BNA and other premier tax journals. You can follow Sylvia on twitter and on Google+ and can contact Sylvia via e-mail at sylviadion@prietodiontax.com.

Comments or questions may be submitted by using the on-page "Comment" feature, subject to disclaimer at bottom of page. Other contact options (and Consultation Requests) are also available on Sylvia's associated Firm Profile page.

Other recent “Internet Tax / E-Commerce” posts by Sylvia F. Dion, CPA:

NOTE: All blog content, comments, and participation subject to disclaimer at bottom of page.

Comments

10 Responses to States Follow South Dakota: A By-State Guide on Economic Nexus

  • Posted by Karen on November 10, 2018 11:15am:

    Hi,
    Thank you for your post.It's great to have everything in one succinct document! I am based in the Caribbean and plan to sell art stationary products to the US, through two separate drop shipping companies in the US. One is in Texas and the other being VistaPrint- a Dutch company with regional headquarters in Boston, but the actual printing is done in various locations in the US and Canada. I have read your chart and am not anywhere near the $10,000.00 /yr minimum sales mark (PA and OK). So, does that mean, I can ship to the states listed and not charge/pay sales tax?

  • Posted by Vani on November 2, 2018 4:31am:

    Thank you so much. It really helps and saves me a lot of time to summarize them all!

  • Posted by David on October 26, 2018 12:34pm:

    Thank you for this comprehensive review!
    If my company has economic nexus only, do they have to collect city and other taxes, or just state sales tax?

    • Posted by Author photo of Sylvia F. DionSylvia Dion on November 26, 2018 12:56pm:

      David,
      Hello and thank you for kind comment. Basically, in MOST states that have a city, county, and district sales taxes (we call these local jurisdiction taxes) in ADDITION to the state tax, a company that is required to register, collect, file and remit sales tax (because of the economic nexus rules) will have to do so for all of the applicable taxes. So yes, in general, you will have to charge/collect any applicable county, city, district taxes. There are some exceptions to this general answer (e.g., Alabama is one state where if you register and file under Alabama's Simplified Sellers Use Tax program, you file/pay at one rate, another exception is states like Colorado where the cities administer their own sales tax). I hope you find this helpful.
      Thanks,
      Sylvia

  • Posted by Carel on October 25, 2018 10:49am:

    Hi Sylvia

    Thank you for all the useful information, greatly appreciated.

    As a foreign online seller, the part I don't understand is the transaction threshold. We live in the world of the $0.99 Ebay free shipping sale which at worst case could mean that a foreign seller would need to comply even when only selling $200 (or less) into a particular state.

    Am I missing something in the logic?

    Carel

    • Posted by Author photo of Sylvia F. DionSylvia Dion on November 26, 2018 7:43pm:

      Carel, Thanks for your comment/question. Unfortunately, you are not missing anything in your logic. This is huge issue with the economic nexus laws that say "OR 200 or more transactions" because they indeed have the potential to create sales tax nexus for many smaller sellers. So if you apply these economic nexus laws exactly as they read, even a seller whose product sells for a very small amount could "technically" find the have sales tax nexus. I do hope states think this through and do not try to go after the micro-sellers with these new laws.

  • Posted by Sue on September 15, 2018 12:10pm:

    Thank you for this, it is extremely helpful. Do you have the same information for the following states: Florida, Kansas, Nevada, Idaho, New York, South Carolina, Texas, Virginia and West Virginia?

    • Posted by Author photo of Sylvia F. DionSylvia Dion on September 23, 2018 2:33pm:

      Sue, Thank you so much for the kind comment - so glad you found the chart helpful. Not all states have adopted economic nexus yet - but this is changing and I predict it won't be long before most states have economic nexus rules. I'm updating this chart at least once a week as new states enact or announce economic nexus rules (so check back often). For instance, you'll notice that one of the states you asked about - Nevada - is now on the chart. Any states not yet listed in the chart haven't yet adopted economic nexus rules (so please do check back often). Thanks, Sylvia

  • Posted by Annette on August 14, 2018 9:36pm:

    Sylvia - terrific resource!! Thank you!

    • Posted by Author photo of Sylvia F. DionSylvia Dion on November 26, 2018 7:46pm:

      Annette, thank you so much!! I'm a huge admirer of your work and feel humbled by your positive remark. BTW, I'm updating the economic nexus chart often (its mind-boggling how fast things are progressing and how many states have already adopted economic nexus) - so please check back often. Thanks again! Sylvia

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