Economic Nexus Becoming More Prevalent as the Online Landscape Gains Ground

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Economic nexus has been a hot topic as many companies have expanded their business by selling their products online. States have issued new regulations, laws, and informational bulletins regarding the changing landscape of the impacts of economic nexus, especially in regards to sales tax.

Many states have not only enacted or started to create economic nexus for sale/use tax provisions, but they also have reporting requirements for remote sellers with large penalties for failure to comply. Below is a list of some of the states that you should keep on your radar for sales/use tax nexus if you have a large volume of sales into that state if it is not your home state.

  • Alabama
  • Colorado
  • Connecticut
  • Indiana
  • Maine
  • North Dakota
  • Ohio
  • South Dakota
  • Tennessee
  • Vermont
  • Washington
  • Wyoming

Economic sales/use tax nexus is created if you have*:

Over $100,000 in sales or 200 or more separate transactions

  • IN (7/1/17)
  • CO
  • ME (10/1/17)
  • ND (once Quill is overturned or other federal law is passed)
  • SD (pending Quill litigation)
  • VT (once Quill is overturned or other federal law is passed)
  • WY (7/1/17)

Over $250,000 in sales

  • AL (1/1/16)

Over $500,000 in sales

  • TN (pending litigation, not in effect)
  • OH (1/1/18)

Over $10,000 in sales

  • WA (1/1/18)

Reporting Requirements

  • CT
  • CO
  • VT
  • WA

*This is assuming that a company has no other nexus with the state.

If you have any questions on this topic, please contact Kelly Switt, Bill Sebastiano, or Ashley Barak in our State and Local Tax Department or call us at 847-956-1040.

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