On-Line Retailers and Remote Sellers: Sales and Use Taxes

Originally published by George W. Rendziperis.

The Supreme Court of the United States’ decision in Wayfair, in June 2018, changed the landscape for sales and use taxes nexus for on-line retailers and remote sellers.  Due to budgetary deficits the states are facing due to the downturn in the economy and the Covid-19 Pandemic, states will increase audit activity to raise money.  Companies must be prepared and be proactive in order to avoid or reduce any state tax assessments.

The Wayfair decision lowered the bar in which a company has nexus with a state.   Prior to Wayfair, a company needed a physical presence in the state to be required to collect and remit sales and use taxes.  After Wayfair, states now require an economic presence, generally based on a threshold of sales into the state to create nexus with the state.  Please note, even if a company does not meet the economic thresholds for sales or transactions, as the case may be, but has a physical presence in the state, then the company has nexus with the state because of the physical presence and must register for sales and use taxes in such state.

As a result of the Wayfair decision, all states that impose a sales and use tax, except Florida and Missouri, have adopted an economic nexus standard.  The economic threshold for each state is reflected below. Note that Alaska, Delaware, New Hampshire, Oregon, and Montana do not impose a state sales and use tax.

There are a lot of questions regarding the thresholds amounts by each state.  For example, are all sales counted, gross sales, or just taxable sales?  Do I include sales in which the product is being resold by my customer?   Do I include sales of my product that are made through marketplace facilitators or just direct sales to customers?

States have different meanings on what sales are included in the thresholds.  Freeman Law can help taxpayers navigate state tax laws.  We provide value-driven services and provide practical solutions to complex issues.  If you have any questions, please contact George Rendziperis at 512-663-0132 or George@freemanlaw.com.

State-By-State Economic Nexus Thresholds

States	Economic Thresholds
Alabama	Remote Sellers and Marketplace Facilitators $250,000
Arizona	Remote Sellers $200,000 (2019); $150,000 (2020); $100,000 (2021)   Marketplace Facilitators $100,000
Arkansas	Remote Sellers and Marketplace Facilitators $100,000 or 200 Transactions
California	Remote Sellers and Markplace Facilitators $500,000
Colorado	Remote Sellers and Markplace Facilitators $100,000
Connecticut	Remote Sellers $100,000 and 200 transactions   Marketplace Facilitators $250,000
District of Columbia	Remote Sellers and Marketplace Facilitators $100,000 or 200 Transactions
Florida	N/A
Georgia	Remote Sellers and Marketplace Facilitators $100,000 or 200 Transactions
Hawaii	Remote Sellers and Markplace Faciliators $100,000 or 200 Transactions
Idaho	Remote Sellers and Markplace Faciliators $100,000
Illinois	Remote Sellers and Marketplace Facilitators $100,000 or 200 Transactions
Indiana	Remote Sellers and Marketplace Facilitators $100,000 or 200 Transactions
Iowa	Remote Sellers and Marketplace Facilitators $100,000
Kansas	No Minimum Thresholds
Kentucky	Remote Sellers and Marketplace Facilitators $100,000 or 200 Transactions
Louisiana	Remote Sellers and Marketplace Facilitators $100,000 or 200 Transactions
Maine	Remote Sellers and Marketplace Facilitators $100,000 or 200 Transactions
Maryland	Remote Sellers and Marketplace Facilitators $100,000 or 200 Transactions
Massachusetts	Remote Sellers and Marketplace Facilitators $100,000
Michigan	Remote Sellers and Marketplace Facilitators $100,000 or 200 Transactions
Minnesota	Remote Sellers and Marketplace Facilitators $100,000 or 200 Transactions
Mississippi	Remote Sellers and Marketplace Facilitators $250,000
Missouri	N/A
Nebraska	Remote Sellers and Marketplace Facilitators $100,000 or 200 Transactions
Nevada	Remote Sellers and Marketplace Facilitators $100,000 or 200 Transactions
New Jersey	Remote Sellers and Marketplace Facilitators $100,000 or 200 Transactions
New Mexico	Remote Sellers and Marketplace Facilitators $100,000
New York	Remote Sellers and Marketplace Facilitators $500,000 and 100 Transactions
North Carolina	Remote Sellers and Marketplace Facilitators $100,000 or 200 Transactions
North Dakota	Remote Sellers and Marketplace Facilitators $100,000
Ohio	Remote Sellers and Marketplace Facilitators $100,000 or 200 Transactions
Oklahoma	Remote Sellers and Marketplace Facilitators $100,000
Pennsylvania	Remote Sellers and Marketplace Facilitators $100,000
Rhode Island	Remote Sellers and Marketplace Facilitators $100,000 or 200 Transactions
South Carolina	Remote Sellers and Marketplace Facilitators $100,000
South Dakota	Remote Sellers and Marketplace Facilitators $100,000 or 200 Transactions
Tennessee	Remote Sellers and Marketplace Facilitators $100,000
Texas	Remote Sellers and Marketplace Facilitators $500,000
Utah	Remote Sellers and Marketplace Facilitators $100,000 or 200 Transactions
Vermont	Remote Sellers and Marketplace Facilitators $100,000 or 200 Transactions
Virginia	Remote Sellers and Marketplace Facilitators $100,000 or 200 Transactions
Washington	Remote Sellers and Marketplace Facilitators $100,000
West Virginia	Remote Sellers and Marketplace Facilitators $100,000 or 200 Transactions
Wisconsin	Remote Sellers and Marketplace Facilitators $100,000 or 200 Transactions
Wyoming	Remote Sellers and Marketplace Facilitators $100,000 or 200 Transactions

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