E-Commerce

Only Florida and Louisiana remain among the sales tax states that have not enacted laws to require remote collection to reap the benefit of the June 2018 Supreme Court ruling in Wayfair v. South Dakota.

Thirty seven states and the District of Columbia now have laws requiring remote sales tax collection, according to the National Conference of State Legislatures.

A 2018 high court decision has been positive for state and local government budgets, but not as much a boost as some of the estimates had predicted.

New York will require out-of-state retailers with annual sales of more than $300,000 or 100 transactions in the state to collect and remit sales tax.

Four states will become the latest to require out-of-state e-commerce retailers to collect sales tax on Jan. 1 while 10 others aren’t expected to do so until later in 2019.

Another wave of states is expected to begin implementation Jan. 1, according to the National Conference of State Legislatures.

The report found that 61% of the 341 finance officers who participated in the survey anticipate negative future impacts on their city's financial health from the termination of advance refundings, while 35% said they already have seen negative impacts.

States would be barred from starting to require the collection and remittance sales taxes from online vendors located out of state until next year under a bill introduced by two Republicans in the Senate.

As the nation’s most populous state with the largest economy, California could set the upper level benchmark for other large states such as Florida and New York that have not yet announced a sales tax remittance threshold.

Only a few of the 45 states that levy sales taxes have announced plans to begin implementation before the end of this year.

House Judiciary Chairman Bob Goodlatte, R-Va., blasted the Supreme Court’s 5-4 decision in South Dakota v. Wayfair, Inc. as having “the potential to unleash chaos for consumers and remote sellers, particularly small business sellers.”

Tuesday’s House hearing will be chaired by Rep. Bob Goodlatte, R-Va., who was a steadfast supporter of the previous standard under which a remote seller had to have a physical presence in a state in order to be required to collect sales taxes.

State and local governments were advised Thursday to avoid imposing burdens on out-of-state e-commerce retailers that could spark a new round of litigation as they begin implementing the Supreme Court’s June 21 South Dakota v. Wayfair, Inc. ruling on sales taxes.

During a webinar Thursday moderated by the National League of Cities, officials pointed out that the South Dakota v. Wayfair, Inc. sales tax case has been remanded by the U.S. Supreme Court back to the South Dakota Supreme Court.

Congress might provide clarity by preventing states any state from imposing retroactive liability.

Membership in the Streamlined Sales Tax Governing Board is voluntary, but the Supreme Court ruling may serve as an impetus for more states and e-commerce retailers to join.

Sen. Jon Tester, D-Mont., and co-sponsors of a recently offered bill want to prevent businesses in their states from being forced to collect sales taxes from e-commerce transactions.

With the need for Congressional action lessened, governors and state legislatures can focus on fine tuning their own laws, officials said.

Thursday's 5-4 ruling involves a 2016 law enacted by South Dakota requiring out-of-state e-commerce retailers to collect sales tax if they have more than 200 transactions annually or $100,000 in sales within the state.

Only nine states reported making midyear budget cuts totaling $830 million this year compared to 22 states that cut $3.5 billion in 2017.