On June 21st, 2018, a Supreme Court ruling in South Dakota v. Wayfair granted the state of South Dakota authority to impose sales tax obligations on out-of-state transactions. This ruling is having a major impact on many small to mid-sized businesses by creating an "Economic Nexus" in states they do not have a physical location (Nexus) in.
To fully understand the impact of this decision, there are over 10,800 sales tax jurisdictions in the United States that made nearly 400 tax changes just in the first half of 2017. While Fortune 500 businesses can afford to have a dedicated sales tax compliance team, many small to mid-sized businesses cannot and are severely disadvantaged by this ruling.
To help small to mid-sized businesses collect, report, and submit sales tax we are excited to announce a new partnering with TaxJar, a leading sales tax automation service.
With this new partnership, small to mid-sized businesses will benefit from the first “out of the box” unified ERP + eCommerce + POS + Sales Tax automation solution.
The solution will integrate TaxJar’s complex sales tax calculation engine across the ERP and eCommerce modules of Connected Business so that sales tax computation is always 100% accurate. For tax reporting, Connected Business will update TaxJar on all transactions (including Tax Exempt) made in the Connected Business ERP, eCommerce, and POS modules so that TaxJar can take care of the reporting for you.
With Connected Business and TaxJar, tax compliance will be greatly simplified - almost painless. No clunky third-party add-ins and no taxation errors due to the updating of multiple solutions.
We will be holding a short webinar on Friday October 19th to discuss this integration and how it will benefit companies that sell across state lines. No matter what solution your company uses, this will be an informative event that you will want to attend.
We look forward to having you attend the webinar. Until then, take a quick look at the economic nexus rules on the following states:
Alabama
Threshold: $250,000/year based on the previous calendar year’s sales
Summary: According to state law, sellers who exceed the $250,000 sales threshold are required to register for an Alabama sales tax permit, collect sales tax on sales that ship to Alabama, and remit that sales tax to the state.
Effective date: January 1, 2016
Arkansas
Threshold: $100,000/year in gross revenue or 200 or more separate transactions on the previous calendar year’s sales
Summary: According to state law, sellers who exceed the gross sales OR transaction number are required to register for an Arkansas sales tax permit, collect sales tax on sales that ship to Arkansas, and remit the sales tax to the state.
Effective date: Planned for the future (No date given yet)
Colorado
Threshold: $100,000/year in gross revenue or 200 or more separate transactions on the previous or current calendar year’s sales
Summary: According to state law, sellers who exceed the gross sales are required to register for a Colorado sales tax permit, collect sales tax on sales that ship to Colorado, and remit the sales tax to the state.
Effective date: October 1, 2018
Connecticut
Threshold: $250,000/year in gross revenue AND 200 or more separate transactions on the previous calendar year’s sales
Summary: According to state law, sellers who exceed the gross sales AND transaction number are required to register for a Connecticut sales tax permit, collect sales tax on sales that ship to Connecticut, and remit the sales tax to the state.
Effective date: December 1, 2018
Georgia
Threshold: $250,00/year in gross revenue, or makes sales into Georgia in more than 200 separate transactions in the previous or current calendar year
Summary: According to the state, sellers that meet either the sales or transaction number thresholds are required to register for a Georgia sales tax permit, collect sales tax on sales that ship into Georgia, and remit sales tax to the state.
Effective date: January 1, 2019
Hawaii
Threshold: $100,000/year in gross revenue, or makes sales into Hawaii in more than 200 separate transactions in the previous or current calendar year
Summary: According to the state, sellers that meet either the sales or transaction number thresholds are required to register for a Hawaii sales tax permit, collect sales tax on sales that ship into Hawaii, and remit sales tax to the state.
Effective date: July 1, 2018
Illinois
Threshold: $100,000/year in gross revenue, or makes sales into Illinois in more than 200 separate transactions in the previous twelve months
Summary: According to the state, sellers that meet either the sales or transaction number thresholds are required to register for a Illinois sales tax permit, collect sales tax on sales that ship into Illinois, and remit sales tax to the state.
Effective date: October 1, 2018
Indiana
Threshold: $100,000 in gross revenue in the previous calendar year, or makes sales into Indiana in more than 200 separate transactions in the current or last calendar year
Summary: According to state law, sellers who exceed either the gross sales or transaction number threshold are required to register for an Indiana sales tax permit, collect sales tax on sales that ship to Indiana, and remit that sales tax to the state.
Effective date: October 1, 2018
Iowa
Threshold: $100,000/year in gross revenue, or makes sales into Iowa in more than 200 separate transactions in the previous or current calendar year
Summary: According to the state, sellers that meet either the sales or transaction number thresholds are required to register for an Iowa sales tax permit, collect sales tax on sales that ship into Iowa, and remit sales tax to the state.
Effective date: January 1, 2019
Kentucky
Threshold: $100,000/year in gross revenue, or makes sales into Kentucky in more than 200 separate transactions in the previous or current calendar year
Summary: According to the state, sellers that meet either the sales or transaction number thresholds are required to register for a Kentucky sales tax permit, collect sales tax on sales that ship into Kentucky, and remit sales tax to the state.
Effective date: July 1, 2018
Louisiana
Threshold: $100,000/year in gross revenue, or makes sales into Louisiana in more than 200 separate transactions in the previous or current calendar year
Summary: According to state law, sellers who exceed either the gross sales or transaction number threshold are required to register for an Indiana sales tax permit, collect sales tax on sales that ship to Indiana, and remit that sales tax to the state.
Effective date: January 1, 2019
Maine
Threshold: $100,000 in gross revenue in the previous calendar year or current calendar year, or makes sales into Maine in more than 200 separate transactions in the previous calendar year or current calendar year
Summary: According to state law, sellers who either exceed the gross sales or transaction number threshold are required to register for a Maine sales tax permit, collect sales tax on sales shipped to Maine, and remit that sales tax to the state.
Effective date: July 1, 2018
Maryland
Threshold: $100,000/year in gross revenue, or makes sales into Maryland in more than 200 separate transactions in the previous or current calendar year.
Summary: According to the state, sellers that meet either the sales or transaction number thresholds are required to register for a Maryland sales tax permit, collect sales tax on sales that ship into Maryland, and remit sales tax to the state.
Effective date: October 1, 2018
Massachusetts
Threshold: $500,000 in sales over the preceding calendar year, and 100 or more transactions resulting in delivery into Massachusetts in the preceding calendar year
Summary: According to state law, sellers who exceed the gross sales and transaction number threshold are required to register for a Massachusetts sales tax permit, collect sales tax on sales that ship to Massachusetts, and remit that sales tax to the state.
Effective date: January 1, 2019
Michigan
Threshold: $100,000 in gross revenue in the last calendar year or makes sales into Michigan in more than 200 separate transactions in the previous calendar year.
Summary: According to state law, sellers who exceed the $100,000 threshold or the transaction number threshold are required to register for a Michigan sales tax permit, collect sales tax on sales that ship to Michigan, and remit sales tax to the state.
Effective date: October 1, 2018
Minnesota
Threshold: $100,000 in gross revenue in the last 12 months or makes sales into Minnesota in more than 100 separate transactions in the previous 12 months.
Summary: According to state law, sellers who exceed either the $100,000 threshold or the transaction number threshold are required to register for a Minnesota sales tax permit, collect sales tax on sales that ship to Minnesota, and remit sales tax to the state.
Effective date: October 1, 2018
Mississippi
Threshold: Sales into Mississippi that exceed $250,000 in the prior twelve months
Summary: According to state law, sellers who exceed the $250,000 threshold are required to register for a Mississippi sales tax permit, collect sales tax on sales that ship to Mississippi, and remit sales tax to the state.
Effective date: December 1, 2017
Nebraska
Threshold: Sales into Nebraska exceeding $100,000 or sales were made in 200 or more separate transactions in the current or last calendar year.
Summary: According to the state, sellers who exceed the sales threshold or transaction number are required to register for a Nebraska sales tax permit, collect sales tax on sales that ship into Nebraska, and remit sales tax to the state.
Effective date: January 1, 2019
New Jersey
Threshold: Sales of $100,000 in New Jersey, or more than 200 transactions in the state in the current or last calendar year
Summary: According to the state, sellers that meet either the sales or transaction number thresholds are required to register for a New Jersey sales tax permit, collect sales tax on sales that ship into New Jersey, and remit sales tax to the state.
Effective date: October 1, 2018
Nevada
Threshold: $100,000/year in gross revenue the previous calendar year OR 200 or more separate transactions in the previous or current calendar year.
Summary: According to the state, sellers that meet either the sales or transaction number thresholds are required to register for an Nevada sales tax permit, collect sales tax on sales that ship into Nevada, and remit sales tax to the state.
Effective date: October 1, 2018
North Carolina
Threshold: $100,000/year in gross revenue, or makes sales into North Carolina in more than 200 separate transactions in the current or last calendar year.
Summary: According to the state, sellers that meet either the sales or transaction number thresholds are required to register for a North Carolina sales tax permit, collect sales tax on sales that ship into North Carolina, and remit sales tax to the state.
Effective date: November 1, 2018
North Dakota
Threshold: Sales into North Dakota exceeding $100,000 or sales were made in 200 or more separate transactions
Summary: According to the state, sellers who exceed the sales threshold or transaction number are required to register for a North Dakota sales tax permit, collect sales tax on sales that ship into North Dakota, and remit sales tax to the state.
Effective date: October 1, 2018
Oklahoma
Threshold: Sales in Oklahoma of at least $10,000 in the previous 12 months
Summary: This is a “notice & report law” which was not affected by the South Dakota v. Wayfair case. That means that this law has been in effect and was being legally enforced before the June 21, 2018 date the Wayfair ruling was handed down. Sellers who meet the threshold are required to elect to do one of the following on or before June 1 of each calendar year: 1) Register for an Oklahoma sales tax permit and collect sales tax on Oklahoma sales and 2) Comply with Oklahoma’s notice and reporting requirements
Effective date: 4/10/2018
Pennsylvania
Threshold: Sales into Pennsylvania that exceeded $10,000 in the previous 12-month period
Summary: According to Pennsylvania, sellers who meet the threshold are required to make an election by March 1 of every year and do one of two things: 1) Register for a Pennsylvania sales tax permit, collect sales tax on sales that ship into Pennsylvania, and remit sales tax to the state. 2) Comply with the state’s rigorous “notice and reporting requirements.”
Effective date: April 1, 2018
Rhode Island
Threshold: Sales in Rhode Island were of $100,000 or more, or exceeded 200 separate transactions in the state in a calendar year
Summary: According to the state, sellers that meet either the sales or transaction number thresholds are required to register for a Rhode Island sales tax permit, collect sales tax on sales that ship into Rhode Island, and remit sales tax to the state.
Effective date: July 15, 2017
South Carolina
Threshold: Sales of $100,000 in South Carolina in the previous or current calendar year
Summary: According to the state, sellers that meet either the sales or transaction number thresholds are required to register for a South Carolina sales tax permit, collect sales tax on sales that ship into South Carolina, and remit sales tax to the state.
Effective date: November 1, 2018
South Dakota
Threshold: Sales of $100,000 in South Dakota, or more than 200 transactions in the state in a the current or last calendar year
Summary: According to the state, sellers that meet either the sales or transaction number thresholds are required to register for a South Dakota sales tax permit, collect sales tax on sales that ship into South Dakota, and remit sales tax to the state.
Effective date: November 1, 2018
Tennessee
Threshold: Sales exceeding $500,000 in the state in the previous 12 months
Summary: According to the state, sellers with sales exceeding the threshold are required to register for a Tennessee sales tax permit, collect sales tax on sales that ship into Tennessee, and remit sales tax back to the state.
Effective date: July 1, 2017
Utah
Threshold: Sales of $100,000 or more in the state, or at least 200 individual sales transactions into the state in the current or last calendar year.
Summary: According to the state, sellers with sales equal to or exceeding the sales or transaction number thresholds are required to register for a Utah sales tax permit, collect sales tax on sales that ship into Utah, and remit sales tax to the state.
Effective date: January 1, 2019
Vermont
Threshold: Sales of $100,000 or more in the state, or at least 200 individual sales transactions into the state
Summary: According to the state, sellers with sales equal to or exceeding the sales or transaction number thresholds are required to register for a Vermont sales tax permit, collect sales tax on sales that ship into Vermont, and remit sales tax to the state.
Effective date: July 1, 2018
Washington
Threshold: Sales of $100,000 or more into the state OR 200 separate transactions into Washington in the current or last calendar year.
Summary: According to the state, sellers with sales equal to or exceeding the sales or transaction number thresholds are required to register for a Washington sales tax permit, collect sales tax on sales that ship into Washington, and remit sales tax to the state. Notice & Report Threshold: Sales of $10,000 or more into the state. According to Washington Notice & Report, sellers who make $10,000 or more in sales to buyers in the state are required to do one of two things: 1) Register for a Washington sales tax permit, collect sales tax on sales that ship into Washington, and remit sales tax to the state. 2) Comply with Washington’s rigorous notice and reporting requirements.
Effective date: Notice & Report (January 1, 2018) Economic Nexus (October 1, 2018)
Wisconsin
Threshold: Sales of $100,000 or more annually or 200 or more separate transactions into the state in the current or last calendar year.
Summary: Unlike other states on this list, Wisconsin did not have an economic nexus law in effect before Wayfair v. South Dakota. However, in response to the SCOTUS decision, the Wisconsin Department of Revenue issued a statement about how Wisconsin intends to enforce the Wayfair decision.
Effective date: October 1, 2018
Wyoming
Threshold: Sales of $100,000 or more into the state, or 200 or more separate transactions into the state
Summary: According to the state, sellers with sales equal to or exceeding the sales or transaction number thresholds are required to register for a Wyoming sales tax permit, collect sales tax on sales that ship into Wyoming, and remit sales tax to the state.
Effective date: July 1, 2017