Multi-State Nexus: What you need to know after the Game Changing Wayfair Decision
Nick Preusch CPA, JD, LLM, is a tax manager with PBMares, LLP. Nick has participated in helping high wealth individual and large business entities with complex tax compliance, along with specializing in international, non-for-profit tax issues, and tax ethics issues.
Nick has also worked with the Internal Revenue Service as a Revenue Agent and an Attorney with the IRS Office of Professional Responsibility. Nick is a graduate of Carthage College with a BS in Accounting and Business, the University of Connecticut with a MA in Accounting, Case Western Reserve University with a JD, and Georgetown University with an LLM in taxation. Nick has also authored publications for the AICPA’s Journal of Accountancy, AICPA’s Tax Advisor, NATP’s Tax Pro Journal, and CCH’s Journal of Tax Practice and Procedure. He also co-authored a textbook, Tax Preparer Penalties, and Circular 230 Enforcement, published by Thomson Reuters. He has lectured nationally on topics such as ethics, complex tax transactions, and IRS practice and procedure.
Currently, Nick is an adjunct professor at the University of Mary Washington. Nick has been recognized as the Top 5 Under 35 CPAs in Virginia by the VSCPA in 2017, CPA Practice Advisor’s Top 40 Under 40 in 2018, and is a member of the VSCPA’s Tax Advisory Committee, and the AICPA’s Tax Practice and Responsibilities Committee.
As businesses use more and more e-commerce to reach customers, it becomes highly likely that the business will eventually cross state lines. Most companies are comfortable collecting and remitting sales tax to their home state but often struggle to know when and why state sales taxes may need to be collected from different states. For the longest time, these companies were able to rely on a Supreme Court case known as Quill. Under Quill, the basic rule required a physical presence in the state in order to meet the obligation to file and collect sales taxes for that state.
The Quill case was decided before the internet was really a thing so a lot of states took the view that this law was really outdated. This would allow states to go after more state sales tax revenues in order to help their budgets. In order to do this, the states started to look at internet sales across state lines. As part of this, several states developed new laws that would allow them to collect more sales taxes from companies outside of their state. The major flaw in this realm came from the state of South Dakota. The law was eventually challenged which gave us what is now known as the Wayfair decision. This case was decided at the US Supreme Court and is now the law of the land.
Wayfair is the biggest sales tax case since Quill and has redefined how states can go after sales tax revenues. Since the decisions, almost all states have brought some kind of legislation forward in order to broaden their base to collect more sales taxes.
Sales taxes can be tricky as well because typically they are collected at the time of sale. However, if a company fails to collect these taxes, the state’s only recourse may be to directly collect the sales tax from the company. This will lead to a decrease in the overall profits on each sale as the state sales tax would not have been added on when the sale occurred and most customers will not pay sales tax months after the transaction was already completed.
This webinar will go into the Wayfair case and discuss what it means for businesses and what businesses need to understand about the case. The discussion will also cover what businesses can do going forward to make sure they are in compliance with these new rules and laws as well as what to look out for in the future. This webinar will also help to issue spot anything that could come up under the new Wayfair decision if a company uses e-commerce.
As states become more aggressive in collecting and fighting for revenues, it will be imperative for businesses to cover themselves with a deep understanding of the new rules so that they can help avoid penalties as well as the tax due from these states. This will end up helping the company to protect revenues and keep away from reduced margins typically associated with sales tax audits.
- Rules under the Quill decision
- Rules under the Wayfair decision
- What changes now that Wayfair is decided
- What issues should the company’s look with sales taxes
Course Level - Basic/Fundamental
Who Should Attend
- Business Owners
Why Should Attend
Businesses are utilizing e-commerce more and more in order to generate revenues. One of the major issues with e-commerce, a collection of state sales taxes, was taken to the Supreme Court and decided this past year. Since the decision, numerous states have enacted laws to comply with this court decision and to expand their ability to collect sales tax. More and more states are adopting these rules as their legislatures meet and very few states have not done anything in regards to their sales tax.
The decision in question is the Wayfair case. For the past 25 years, sales tax questions across state lines relied on the Quill decision. Under that decision, there needed to be a physical presence in the state in order for a company to be required to collect sales taxes on behalf of a state. For example, a mail-order company would need some sort of physical presence in the state they were selling in order to collect sales tax.
Wayfair totally changes the game and upends what we know from Quill. It states that physical presence is no longer required for online retailers to need to remit state sales taxes to different states.
This decision will change online shopping for consumers and businesses for the foreseeable future as more states look to adopt similar rules laid out in the Wayfair case. As such, people need to be aware of these new rules and what states are starting to adopt in order to properly counsel their clients or businesses in order to fully comply with these new regulations.