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Sales Taxation of Internet Transactions 5-Years-Post-Wayfair

June 06, 2023 (3 min read)

Online retailers had largely escaped state sales and use taxes before the U.S. Supreme Court decided South Dakota v. Wayfair, Inc. in 2018. Wayfair overruled the previous physical presence test which required sufficient nexus to impose a sales tax on electronic transactions.  The decision allowed states to compel out-of-state companies to collect and remit sales and use taxes on these transactions based on where the buyer resides. Many states established a transactional threshold, post-Wayfair, but are rethinking that in favor of a minimum gross sales requirement.

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