What Has Changed About Nexus and Wayfair?

February 21, 2020

Selling over the internet means you need to know the concept of nexus.


Gary Bingel: What changed about Nexus was last year in the summer of 2018 the Supreme Court came out with the Wayfair decision which drastically changed the landscape of what constitutes Nexus for sales tax and possibly all tax purposes. Specifically, in the Wayfair decision, the Supreme Court found that merely economic contacts with the state were sufficient to establish Nexus.

Specifically in that case, just having $100,000 of sales in a state or 200 separate transactions were sufficient contacts with the state to allow the state to force you to collect sales tax on your sales into the state. Currently, of the 46 states and the District of Columbia that actually impose a sales tax, over 40 of these jurisdictions now have some sort of interpretation or some sort of provision related to Wayfair and establishing economic Nexus for sales taxes.

It took about a year and most states have now jumped on that bandwagon as a means of collecting sales tax from out-of-state remote sellers. One thing to keep in mind, that these Wayfair and economic Nexus provisions relate not just to remote sellers but to all types of companies that may have sales across state lines, so they are much broader than many people initially believe them to be.

About Gary Bingel

Gary Bingel, Partner-in-Charge of the National State and Local Tax Group, with expertise focuses on state and local income taxation, and sales and use tax consulting. He has significant experience serving clients in the manufacturing, retail, pharmaceutical, biotechnology, technology and service industries.

More in This Series

How Does Wayfair Impact Companies?

You need to understand the concept of Nexus if you are selling over the internet.

How Has Nexus Been Applied Previously?

Presence through intangibles, agents, affiliates and really any sort of minimal connection that people may not think of as physical presence was nevertheless found to be sufficient to establish physical presence for purposes of Nexus and the sales tax and income tax area.

What is the Future of Nexus?

Save you a lot of time, grief and money by knowing your Nexus tax exposure. You need to consider not just your sales tax footprint, but where you're filing things such as income taxes and franchise taxes as well.

How Should Companies Manage Wayfair Changes?

A discussion on how companies should manage Wayfair changes including understanding their Nexus footprint, sales tax and your revenue streams and the taxability of them.

Risks of Apportionment

Apportionment issues present challenges and opportunities. Proper planning can help to manage your overall tax liabilities, and knowledge of these issues can help mitigate potential exposures and combat aggressive taxing authorities on audit.

Apportionment Opportunities

In this Apportionment overview, Gary Bingel discusses challenges and opportunities and how planning can help manage overall tax liabilities, and knowledge can help mitigate potential exposures and combat aggressive taxing authorities on audit.

What is Apportionment?

Apportionment is the manner in which income is divided between various taxing jurisdictions. A number of states have moved to receipts receiving more emphasis. Our video overview sets the stage for our pitfalls, risks and opportunities discussions.

What is Nexus?

In this Nexus overview, Gary Bingel discusses how Nexus varies state by state, the contacts required to generate taxes, "physical presence" and other key focus areas including remote employees, and new sourcing rules among others.