South Dakota v. Wayfair – Economic Nexus and Manufacturers’ Sales Tax Obligations

It has been more than three years since the U.S. Supreme Court’s landmark decision in South Dakota v. Wayfair. In that case, the Court held that a state may require out-of-state sellers to collect and remit sales tax even if they lack a physical presence in the state. Since then, nearly every state with a sales tax has enacted an “economic nexus” law that extends the reach of its sales tax collection obligations to sellers beyond its borders.

Although sales by manufacturers are often exempt from sales taxes, they cannot afford to ignore economic nexus laws in states where they do business. Even if their sales are exempt, these laws may create new compliance obligations and substantially increase administrative burdens with respect to sales taxes.

Source: orba.com

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