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Wayfair US Supreme Court case allowing individual states to apply “nexus” rules
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In the aftermath of last year’s Wayfair US Supreme Court case allowing individual states to apply “nexus” rules to internet-based sales, the fall-out for small business continues for online retailers selling out of state. In most cases (24 states), the states have imposed a nexus application once sales have exceeded $100,000 OR 200 transactions. For the small business selling many inexpensive items, this nightmare of compliance may be one of the forbidding aspects of small business growth in our country’s history. Because 48% of our GDP comes from small businesses according to the SBA, the long-term negative effects of this legislation are chilling. One state, Washington, has become a leader in anti-small business activity with their $10,000 threshold!
At Taxspeaker we have been forced to spend nearly $75,000 to re-program our website, as well as about $5,000 annually for sales tax compliance software. Our plans had been to hire another new employee this year, but the failure of Congress to pass any meaningful sales tax legislation, combined with Congressional representative ignorance of the effects on small business, combined with Congressional intentional avoidance of the issue makes this a bigger long-term negative than any income tax legislation. We don’t know about you, but we have written letters, made phone calls and recorded videos, all of which are ignored by our representatives of both parties who are much too busy investigating each other to actually do anything
States marked with N have nexus laws affecting remote sellers. These include click-through nexus, economic nexus, software nexus, marketplace sales taxes, and/or reporting requirements for non-collecting sellers.
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Sales tax nexus is the connection between a seller and a state that requires the seller to collect and remit tax on sales made in that state.
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Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of Manning & Associates and / or MANNINGTAX.COM. This information is published for informational purposes only.
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