The Supreme Court's Wayfair Decision: What it Means for Your Dealership-Slide Deck

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This document is a presentation by Rex A. Collins, a Principal at HBK CPA's and Consultants, on the topic of the impact of the Wayfair v. South Dakota case on dealerships. The Wayfair case led to a change in the physical presence requirement for businesses to charge and collect sales tax. Previously, businesses were only required to do so if they had a physical presence in the state, but now they may be required to collect sales tax even if they have no physical presence. The Supreme Court determined that the physical presence test was "unsound and incorrect" and favored remote sellers over local brick and mortar stores. South Dakota passed a law requiring companies with over $100,000 in sales to collect their 4.5% sales tax on purchases made by in-state residents. Quill Corporation, NewEgg, and Overstock, all of whom had previously argued against the physical presence requirement in court, opposed this legislation. The Supreme Court rejected their arguments and upheld the law. The decision in the Wayfair case is seen as significant because it eliminates the physical presence requirement for sales tax nexus. The presentation also discusses reporting requirements for remote sellers and the issue of whether or not sales tax applies to shipping charges. The presenter poses questions for businesses to consider in light of the Wayfair decision, such as whether they know their footprint in terms of sales and transactions in different states, and whether they are aware of the taxable status of their goods and services in customer states.

Keywords

Wayfair v. South Dakota

physical presence requirement

sales tax

remote sellers

brick and mortar stores

South Dakota law

sales tax nexus

reporting requirements

shipping charges

taxable status