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Wayfair Collects Sales Tax in Over Twenty States

The most significant event in the recent sales tax world is the US Supreme Court’s June 2018 ruling in South Dakota v. Wayfair, in which the Court overturned the Supreme Court’s 1992 decision in Quill Corp v. North Dakota and effectively struck down the physical presence nexus requirement that was the standard widely used.

With the Wayfair decision, the Supreme Court effectively ruled that nexus can be established without any in-state physical presence if the seller’s sales exceed a certain economical threshold. Most states interpret it as dollar amount of total sales or number of transactions to the state. In the South Dakota statute, an online retailer would be liable for the collection of sales and use tax if the seller exceeds $100,000 in gross revenue or 200 unique transactions into the state.

Prior to 2018, one of the best things about buying through Wayfair is that Wayfair does not charge sales tax except for orders shipping to Alabama, California, Georgia, Illinois, Kentucky, Massachusetts, New Jersey, New York, North Carolina, Pennsylvania, Texas, Utah, and Canadian provinces. Things have started to change post the Supreme Court's June ruling. As of October 2018, Wayfair charges sales tax for orders shipped to over 20 states. See details.