Meet the South Dakota v. Wayfair decision. This decision finds in favor of “Economic Nexus” which means you no longer have to set foot in a state or have a physical presence there to be responsible for collecting and remitting sales tax to a state. The decision basically allows states to establish an economic dollar and or number of sales which when met or exceeded by a seller makes the seller responsible for the collection and remission of sales tax to that state.

This does not overturn the prior 1992, U.S. Supreme Court in the Quill Corp. v. North Dakota, that established the physical presence test for nexus and the requirement to collect state sales tax. It in effect creates a two-part test where sales tax liability can be passed through the old physical presence test or through the new economic nexus test.

Below you will find a chart showing what states currently have an economic test, along with some basic information on the test, post Wayfair decision guidance provided by the state if any, notice requirements and information for marketplace facilitators. We have also included an indication if the state is a member of the Streamlined Sales Tax Agreement.