South Dakota v. Wayfair and Internet Sales Tax
Updated: Nov 29, 2021
On Thursday, June 21st, a landmark decision was reached by the Supreme Court in the case of “South Dakota v. Wayfair.” This 5-4 decision overturned the previous 1992 Supreme Court ruling that barred states from collecting taxes where businesses did not maintain a physical presence or sustain employees. This decision was reached as the court claims the law incentivized business to avoid brick and mortar locations, effectively creating a judicially supported tax shelter. Those behind this ruling assert that this law will promote local shopping and infuse states with enhanced tax revenue.
Thirty-one states currently leverage online sales tax of some variety. This ruling will likely promote an adjustment to existing laws and incentivize the remaining nineteen states to collect. Bottom line is this: if you aren’t already collecting taxes online, you may soon be forced to do so as individual states start to weigh in.
Here are a few links that speak more to this issue:
TaxJar, an internet based tax aggregating service, is holding a webinar next week to help businesses understand the impact this may have on them. You can sign up for this webinar here: https://www.taxjar.com/south-dakota-vs-wayfair/
If you would like more information about how Liftoff is addressing internet based sales tax, please feel free to reach out to your account management team for additional details.
Sincerely, The Launchpad and Liftoff Team