How Does Wayfair Impact Companies?

February 21, 2020

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


Gary Bingel:So there are many ways that this new decision impacts companies. The first and most obvious is that most companies are going to have a greatly expanded nexus footprint for sales tax as well as for other taxes potentially. They're going to face increased costs, especially in the tax department as far as having to implement new IT systems, more administrative costs as far as increased tax filings, as well as everything that goes along with that such as increased audits, increase notices, more time spent updating rates packages and their invoicing system, things like that.

It's also important to remember that just like companies are struggling, states are still struggling as well with how they're going to implement the Wayfair decision and their economic Nexus provisions. They've been flooded with new registrations as well as trying to struggle with how they're going to interpret a lot of the nuances of economic Nexus and their thresholds. For instance, what is defined as a separate transaction? Is it a monthly recurring charge for a subscription or is it just the one time contract if it's an annual fee. Things such as that still have yet to be resolved in many cases.

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

What Has Changed About Nexus and Wayfair?

When you sell over the internet you need to understand the concept of nexus. Because of sales across state lines sales tax must be collected.

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.