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.

Sales Tax System Recent Updates and How we Help You Navigate Sales Tax as an Amazon FBA Seller After the South Dakota vs Wayfair Supreme Court Decision:
    • Up to date welcome video with updates on the new platform and process
    • New video on our Sales Tax Calculations Page
    • New Sales Tax Calculator Tool (this will help you quickly add up your past sales tax + penalties + Interest and how much you would save by filing a VDA).
    • Updated section on U.S. banking (for foreign sellers)
    • Remitting sales tax- steps with Taxify to set up your account plus steps to file past returns with Taxify.
    • New section that reviews the big picture on foreign qualification into different states plus video overview
    • A chart on what is NOT considering doing business in a state (relates to foreign qualification which is beyond applying for a sales tax permit).
    • Chart for fines and penalties for NOT registering to do business in a state (related to foreign qualification which is beyond applying for a sales tax permit).
    • New webinar video on how to sell your Amazon business for 6-8 figures, under training
    • Plus several states have been updated with even more step-by-step approach to apply for permits on your own or to use our $75 per state service.
    • Court Case South Dakota vs Wayfair Decision
  • Economic Nexus States

Discover more at Sales Tax System Overview.