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New Online Sales Tax Requirements for Out-of-state Sellers

Earlier this year a Supreme Court ruling granted states the authority to impose sales tax even if the seller lacks physical presence in the state. This reverses a longstanding precedent and has sweeping repercussions for online sales. Under these new economic nexus policies, remote sellers of products with no physical presence in a state are required to collect and remit sales tax once they reach a certain threshold of economic activity. A physical presence is no longer needed to trigger the obligation to collect sales tax. 

What does this mean to your business if you make online sales in a state where you don’t have a physical presence? In the short time since that Supreme Court decision, over 30 states have adopted economic nexus. These states are taking some type of action to pass laws or regulations to require sales tax collection by remote sellers now or in the immediate future. There’s little doubt that the remaining states have similar changes on their agenda as well.

To help you determine your business’ economic nexus, we’ve listed the states currently enforcing sales tax collection and the taxable thresholds. Take note that it only takes $10,000 in sales to be responsible in Pennsylvania, showing this change can quickly affect your business.

Do you have questions on how this will impact your business? We are here to help, contact us.

 

States enforcing online sales tax collection and their taxable thresholds.

              *States enforcing online sales tax collection and their taxable thresholds.