South Dakota vs Wayfair Supreme Court Decision Insights


The South Dakota vs Wayfair Supreme Court decision now says that sales tax is not going way, only changing.

The U.S. Supreme Court voted 5-4 on June 21st, to overturn the 1992 Quill Case that required physical nexus (FBA inventory for example) before you had to collect and remit sales tax.

This Supreme Court decision allows the states to collect sales taxes from MOST (not all) online retailers, not just Amazon FBA sellers.

The big reason is that states are losing a fortune in sales tax revenues and both sellers and consumers (with use tax) have been avoiding them! FBA Seller Use

Here is a link to the U.S. Supreme Court Case:

What does this mean to you (if you sell on Amazon FBA)?

As an Amazon FBA seller, nothing changes except if you are NOT in compliance this will give states more ammunition to come after you full speed for compliance. That means time to order your sales tax permits and move forward.

If you are in compliance as an Amazon FBA seller, your next step is to watch the states that come up with new economic nexus rules. These are rules that say, even if no FBA in a state, but you sell above $100K in a year or over 200 transactions (very low number), you are required to collect and remit sales tax.

My company, Sales Tax System, covers all the FBA States and Economic States for you to apply for sales tax permit registrations as the first step in the process. You might need to take a serious look at what you owe in past liabilities (for the Amazon FBA states where you have stock) as you move forward and this is how we are able to help.

Your Options after the South Dakota vs Wayfair Supreme Court Decision to Get Back on Track as an Amazon FBA Seller with Sales Tax

Here are Your Options as an FBA Seller:

Continue selling on FBA:

1. Determine your liability

2. Move forward to apply for states that you are able to afford to pay past fees due. Consider financing options if you are not.

3. Start collecting and remitting moving forward.

Stop Selling on FBA (the same three steps except you will be filing final tax returns).

Unfortunately, if you owe $100 to a state, you can’t just pay the $100, you must register for a permit, file the past returns, pay the amount due, file the final returns.

If you don’t know how many states in which you have FBA stock, go to A2x Accounting and they have a service that pulls a report to tell you when you first had stock in the FBA states. This will tell you how many permits you will need.

The goal is to be in a position within 90 days where you have your permits, are on track, have filed past returns, paid past fees and can sleep at night either growing your business (and watching your competitors drop off one at a time) or closing down your business properly knowing this will not come back to haunt you down the road.

The best part is that we are able to help you get there and GUIDE you through the process.

If you need help with sales tax compliance or permits, let us know. We have an entire system to support you through the process or we offer separate sales tax permit services. Learn more at our sales tax blog: Sales Tax System blog.