- Six years ago, the U.S. Supreme Court made a landmark decision in the Wayfair case, introducing the concept of sales tax or use tax liability for out-of-state sellers when they reach a state-designated economic nexus.
- This decision allowed states to require out-of-state sellers to collect and remit sales tax even if they don’t have a physical presence in the state, based on certain economic thresholds.
- State laws define economic nexus differently, and when a remote supplier reaches this nexus, they are obliged to register for state sales tax.
- Since the Wayfair ruling, states have been expanding the taxability network for digital products and services.
- For example, Rhode Island introduced sales tax liability for Software-as-a-Service (SaaS), infrastructure-as-a-service (IaaS), and platform-as-a-service (PaaS).
Source 1stopvat
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