Why States are Continuing to Abolish the Wayfair Transaction Test

The U.S. Supreme Court’s 2018 South Dakota v. Wayfair decision decided that states could require remote sellers to collect and remit sales tax on their in-state sales. Since that ruling states have relied on the original two types of economic nexus thresholds, or “tests,” to determine when a remote seller must begin collecting and remitting sales and uses taxes:

1. A gross revenue test in which compliance is triggered after remote sellers exceed a specified amount of sales revenue generated in the state during a calendar year; and/or
2. A transaction test in which compliance is required after the remote seller completes a set number (e.g., 200) of individual transactions.

Source: www.vertexinc.com

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