Post-Wayfair Options for States

Key Findings The U.S. Supreme Court in South Dakota v. Wayfair this year ruled that a state may require collection of sales tax by out-of-state internet retailers who sell into the state (“remote sellers”), so long as the law does not discriminate against or place excessive burdens on those engaging in interstate commerce. The Court strongly suggested that a law that follows what we call “the Wayfair checklist” would be constitutional. States can satisfy this checklist by adopting a de minimis threshold, explicitly rejecting retroactive enforcement, and adhering to uniformity and simplification rules in the Streamlined Sales and Use Tax Agreement (SSUTA). Policy choices for state officials include whether to adopt a more generous de minimis threshold, when the qualifying period for the threshold should be, what date enforcement should start, whether to include local taxes, and how to use the revenue. Thirty-two states are acting to pass laws or…

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