Texas Issues Wayfair Sales Tax Guidance

Remote sellers may have to begin collecting sales tax on their sales into Texas in late 2019. This change would be in response to the U.S. Supreme Courts’s decision in South Dakota v. Wayfair.

Upcoming Changes for Remote Sellers After Wayfair

Texas plans to adopt new rules for remote sellers in early 2019. The new rules are not expected to apply retroactively. The anticipated timeframe for collection requirements is sometime in late 2019.

Why Are Things Changing?

In Wayfair, the U.S. Supreme Court held that physical presence is no longer required to establish sales and use tax nexus. Out-of-state sellers with no physical presence in South Dakota are subject to sales and use tax if:

– the seller’s gross sales from the sale of taxable items delivered in South Dakota exceed $100,000; or

– the seller sold taxable items for delivery in South Dakota in 200 or more separate transactions.

In the wake of this decision, many states have begun to adopt new rules for remote sellers.

What Do Remote Sellers Need to Do Right Now?

Right now nothing changes for remote sellers. Until further notice, Texas will continue to follow the physical presence nexus standard. All related guidance previously released by the Comptroller’s office is still valid.

Tax Policy News, Texas Comptroller of Public Accounts, October 2018 (released November 9, 2018)

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CCHTaxGroup

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