• Alabama and Illinois start enforcement Oct. 1, followed by Connecticut on Dec. 1.
• Economic nexus will take effect in Georgia and Iowa on Jan. 1, 2019.
• Several other states, including Louisiana and Minnesota, are still determining the full impact of the ruling on their statutes.
For retailers doing business in multiple states, the mere monitoring of changing laws can be an enormous task. While some state departments of revenue quickly posted information about the Wayfair ruling and its impact on state nexus laws, others have not. That means there are still a lot of unknowns.
Once a business determines it’s reached an economic nexus threshold in a new jurisdiction and has an obligation to collect, it must register to do so with the state tax authority. Under no circumstances should it collect and remit tax in a new jurisdiction before registering to do business there.
Only after fulfilling all registration requirements in a new jurisdiction may a business legally collect and remit sales and use tax. At this point, businesses need to track changes in sales and use tax rates, product taxability, regulations, and a few other areas. These often correspond to the start of a new quarter, but in some states, they can occur at any time.
Sales and use tax compliance has always been challenging, especially for companies doing business in multiple jurisdictions. It is rapidly becoming more so as states expand their taxing authority in the wake of the Wayfair decision.