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To date, 44 of the 45 states that impose a sales tax, as well as the District of Columbia, have now adopted “Wayfair” economic nexus regulations which stem from the landmark Supreme Court ruling from June, 2018. The “Wayfair” ruling removed the physical presence requirements for a state to require a business selling their products into that state to collect and remit sales taxes. Florida and Kansas are the latest states to enact such regulations. Missouri has pending legislation currently sitting with their Governor, who is expected to sign.
Florida enacts economic nexus rules for sales and use taxes
On April 19, 2021, Florida Governor Ron DeSantis signed Senate Bill 50, expanding the definition of “retail sales” to include “remote sales.” As a result, businesses making remote sales into Florida must register and collect sales and use tax on such transactions, including any applicable discretionary sales surtax, if the business has made taxable remote sales in excess of $100,000 over the previous calendar year. The law takes effect July 1, 2021. Affected businesses not previously registered with the Florida Department of Revenue have until September 30, 2021, to complete a Florida Business Tax Application and avoid a “look back” review of previous remote sales and use taxes due.[1]
Kansas legislature overrides governor’s veto, enacting economic nexus rules
Effective July 1, 2021, S.B. 50 requires retailers that have in excess of $100,000 of cumulative gross receipts from Kansas customers in the current or immediately preceding calendar year are considered a “retailer doing business in this state,” and must register for and collect and remit sales taxes.[2] The legislation specifies that a newly registered business that meets the requirement of having in excess of $100,000 cumulative gross receipts in the current calendar year is only required to collect and remit taxes on sales in excess of $100,000; thus, it is not responsible for collecting and remitting tax on sales below the $100,000 threshold.
Missouri legislature passes economic nexus rules for sales and use taxes
On May 14th, 2021 the Missouri Legislature passed S.B. 153.[3] This legislation is pending and Missouri Governor Mike Parson is expected to sign into law. Through this legislation, Missouri would now impose sales and use tax collection and remittance requirements in Missouri on remote sellers and marketplace facilitators that exceed an annual $100,000 sales threshold. Under the pending bill, effective January 1, 2023, remote sellers and marketplace facilitators with more than $100,000 in annual gross receipts sourced to Missouri must collect and remit sales and use taxes as measured by the twelve-month period ending on the last day of the preceding calendar quarter.
If you have questions regarding the new economic nexus regulations or the economic nexus regulations in the 43 other states with a sales and use tax, please reach out to the professionals in our State and Local Tax Practice.
The information provided in this communication is of a general nature and should not be considered professional advice. You should not act upon the information provided without obtaining specific professional advice. The information above is subject to change.
[1] S.B. 50 can be found at https://www.flsenate.gov/Session/Bill/2021/50/BillText/er/PDF.
[2] S.B. 50 can be found at https://www.kslegislature.org/li/b2021_22/measures/sb50/.
[3] S.B. 153 can be found at https://legiscan.com/MO/bill/SB153/2021.
