Breakdown of the Wayfair Decision
On June 21, 2018, the U.S. Supreme Court issued its widely anticipated decision in Wayfair. The Court held that states may require businesses to collect and remit sales and use taxes even if the business has no in-state physical presence.
The Wayfair decision means that states are now free to subject companies to state taxes based on an “economic” presence within their state. Overnight, remote sellers, licensors of software, and other businesses that provide services or deliver their products to customers from a remote location will have to start complying with state and local taxes.
Left unchecked, these state and local tax obligations, and the corresponding potential liability from tax, interest and penalties, will grow over time. Moreover, neglecting your sales and use tax obligations may result in a lost opportunity to pass the sales and use tax burden to customers as intended by state tax laws.