Scott Peterson from Avalara discusses the aftermath of the South Dakota v. Wayfair decision, exploring challenges faced by companies and states, potential future sales tax nexus issues, and the evolution of sales tax laws and compliance post-Wayfair. The conversation highlights the impact on businesses, state tax regulations, and the need for adaptation in tax administration.
Wayfair decision changed sales tax landscape, impacting businesses with new compliance challenges.
Lack of uniformity in sales tax laws and compliance costs highlight ongoing complexities for businesses post-Wayfair.
Deep dives
Impact of Wayfair Decision
The landmark Wayfair decision five years ago drastically changed the state tax landscape by allowing states to require remote sellers to collect sales tax based on thresholds set by individual states. The ruling overruled the previous Quill and National Bellas laws, setting the stage for states to enforce sales tax collection on remote sellers. This decision brought about significant changes in sales tax requirements, impacting businesses operating across state lines.
Challenges Faced by Businesses
Businesses faced challenges post-Wayfair in adapting to the new sales tax regulations, leading to complexities in tax compliance. The lack of uniformity across states in sales tax laws and the burden of compliance costs were major concerns highlighted. Many businesses reported the need to increase prices to offset the expenses incurred in collecting sales tax, indicating ongoing complexities and challenges in tax compliance.
Future Predictions and Concerns
The future landscape of sales tax compliance post-Wayfair may not see significant simplification or uniformity across states. Concerns lie in the potential expansion of Wayfair implications to other tax types, especially corporate income tax. The shift towards using sales as the key factor for corporate income tax apportionment could lead to further complexities and compliance challenges for businesses, indicating an ongoing struggle with tax compliance in the foreseeable future.
Scott Peterson of Avalara discusses the South Dakota v. Wayfair decision, including how companies and states are faring five years later and what could be next with sales tax nexus.
For additional coverage, read these articles in Tax Notes:
*** Credits Host: David D. Stewart Executive Producers: Jasper B. Smith, Paige Jones Showrunner and Audio Engineer: Jordan Parrish Guest Relations: Alexis Hart
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