Alerts and Updates

Supreme Court Decision in Wayfair Imposes New Tax Liability on Non-U.S. Businesses

July 5, 2018

Foreign companies currently selling goods or services in the United States should review their potential state and local sales tax exposure as soon as possible. 

Foreign businesses that sell goods and services in the United States may now have to register for and collect sales/use taxes in thousands of state and local taxing jurisdictions under the Supreme Court’s new decision in South Dakota v. Wayfair, as reported in our previous Alert.

By eliminating the decades-old requirement that a business needs physical presence in a state or local taxing jurisdiction before being subject to sales tax liability in that jurisdiction, businesses in foreign countries that sell into the United States may now have a significant multistate sales tax liability on their U.S. sales. Simply advertising in a state and having as few as 200 sales could now be sufficient to make a foreign business liable for sales tax.

As a result, foreign companies currently selling goods or services in the United States should review their potential state and local sales tax exposure as soon as possible or they may be facing a nasty surprise in the near future as state and local governments start ramping up their tax collection efforts against these businesses.

For More Information

If you have any questions about this Alert, please contact Stanley R. Kaminski, any other member of our State and Local Tax Practice Group or the attorney in the firm with whom you are in regular contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.