- The Wayfair decision changed the previous Supreme Court precedent by establishing that marketplace facilitators can be obligated to collect and remit sales tax based on economic nexus, without physical presence in a state.
- This has led to a patchwork of diverse laws among states, causing increased compliance costs and inefficiencies for marketplace facilitators.
- To address these issues, states should pursue legal
- uniformity by centralizing sales tax administration, limiting thresholds for tax collection, and excluding business-to-business sales to avoid tax pyramiding. Additionally, states should not impose separate fees or registration requirements and allow marketplace facilitators and sellers to freely contract responsibility for tax collection.
- Finally, states should carefully consider the taxation of digital products to avoid overly broad application of sales taxes
Source Tax Foundation
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