What is the Wayfair Decision?
October 02, 2018
The wayfair decision is the recent US Supreme Court decision out of South Dakota which overturned the physical presence requirement of Quill, and held that physical presence is not required to create nexus for sales tax purposes. Nexus can now be created through economic contacts alone. While Wayfair was a sales tax case, its holding was not expressly limited to sales taxes.
Gary Bingel:So, the Wayfair decision was a direct challenge to the Quill Case, which came out of South Dakota. In it, the Supreme Court overturned the physical presence requirement of the Quill case. So now, nexus can be established through economic presence alone. In the Wayfair case, the thresholds at issue were a hundred thousand dollars in sales, or two hundred separate transactions. And the supreme court ruled that those were sufficient to create economic nexus in a state for sales tax purposes. Now, it wasn't just limited to sales tax and could apply to other taxes. And those thresholds may actually be lower than that. The Supreme Court just said those thresholds were sufficient. They didn't set them as a minimum or maximum in any way.