• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Submissions
  • About Us
  • Contact Us
  • May 31, 2023
  • Startup
    • Creating a Plan
    • Funding a Startup
    • Franchise Center
    • Getting Your Office Ready
    • Making Your Business Official
    • Marketing Your New Business
    • Personal Readiness
  • Run & Grow
    • Customer Service
    • Human Resources
    • Innovation
    • Legal
    • Operations
    • Risk Management
  • Leadership
    • Best Practices
    • Communication
    • Green Initiatives
    • Open Culture
    • Strategic Planning
    • People Skills
  • Sales & Marketing
    • Advertising and Lead Generation
    • Marketing Innovations
    • Marketing Plans
    • Online Marketing
    • Relationships
    • Sales Activities
  • Finance
    • Budgeting and Personal Finance
    • Payments and Collections
    • Tax and Accounting
    • Pricing Strategy
    • Working with Investors
    • Working with Lenders
  • Tech
    • eCommerce
    • Hardware
    • Software
    • Security
    • Tech Reviews
    • Telecom
  • Shop

SmallBizClub

Helping You Succeed

taxbandits banner
Home / Finance / Congress Hears From Small Businesses About Problems Caused By Wayfair
Congress Hears From Small Businesses About Problems Caused By Wayfair

Congress Hears From Small Businesses About Problems Caused By Wayfair

839 Views

Jul 7, 2022 By TaxConnections

On June 14, 2022, the Senate Finance Committee heard testimony on the impact on small businesses and remote sales of the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc., 138 S. Ct. 2080, 201 L. Ed. 2d 403 (2018).

In Wayfair, the U.S. Supreme Court ruled that a business’s physical presence in a state (or lack thereof) wasn’t determinative for purposes of whether a state could require the business to collect sales and use taxes from customers located in the state.[1] Overturning decades of precedent, the decision effectively gave states the green(ish) light to force remote sellers to collect sales and use taxes.[2]

Witnesses before the committee discussed a number of difficulties that remote sellers were having in complying with tax collection requirements across multiple states. These include dealing with varying dollar and transaction thresholds, different items subject to sales and use tax, the complexity of local taxes, and costs associated generally with staying compliant across multiple jurisdictions.

There were also calls for Congress to take action to regulate the states’ power to impose tax collection requirements on remote sellers (although how realistic this is remains uncertain).

For more information on this topic, please see our post on The New “Wayfair” Sales Tax Laws in Texas.

[1] Wayfair, 138 S. Ct. at 2099. The Wayfair decision turned on the Court’s interpretation of the Commerce Clause of the U.S. Constitution. The Commerce Clause gives Congress the power “to regulate commerce with foreign nations, and among the several states, and with the Indian tribes.” U.S. Const. art. I, § 8, cl. 3. The Court noted that, “[a]lthough the Commerce Clause is written as an affirmative grant of authority to Congress, . . . in some instances it imposes limitations on the States absent congressional action.” Wayfair, 138 S. Ct. at 2089. Going forward, the question of whether a taxpayer has substantial nexus with a taxing state is to be determined based on whether the taxpayer “‘avails itself of the substantial privilege of carrying on business’ in that jurisdiction.” Wayfair, 138 S. Ct. at 2099 (quoting Polar Tankers, Inc. v. City of Valdez, 557 U. S. 1, 11, 129 S. Ct. 2277, 174 L. Ed. 2d 1 (2009)).

[2] Cases holding that physical presence was a must in this context include National Bellas Hess, Inc. v. Department of Revenue of Illinois, 386 U.S. 753, 87 S. Ct. 1389, 18 L. Ed. 2d 505 (1967) and Quill Corp. v. North Dakota, 504 U. S. 298, 112 S. Ct. 1904, 119 L. Ed. 2d 91 (1992). The Court decided to reverse course in light of the far-reaching technological and social changes caused by the Internet in the years since the Quill decision came down. However, there’s still a live question of whether certain aspects of a state’s tax system may impose an undue burden on interstate commerce that would render its application to remote sellers unconstitutional. Wayfair, 138 S. Ct. at 2099-100.

Congress Hears From Small Businesses About Problems Caused By Wayfair Author: TL Fahring

Filed Under: Finance Tagged With: Taxes

Source: Tax Connections

TaxConnections

TaxConnections

TaxConnections Worldwide Directory of Tax Professionals is an authority site of tax advisors from around the world. As the leaders in our market vertical, you can find and interact with tax professionals in corporations, law firms, public accounting firms, tax services firms, government and academia in one click. Through our innovative technology, we maximize the exposure of a tax professional’s expertise and services to the more than one billion people who go online for tax advice each year.

Related Posts

  • tax-tips-if-you-are-starting-a-business7 Important Tax Tips for Small Businesses
  • employers-face-stiff-affordable-health-care-act-excise-taxes5 Simple Tips Employers and Insurance Providers Need for 2023 ACA Reporting
  • Understanding How Donations & Charitable Giving Reduce Business Taxes

Primary Sidebar

bottom line ad

Random

15 Reasons No One Cares About Your Small Business Right Now

May 31, 2023 By Jeremy Bowler

4 Things to Keep In Mind When Choosing Your Next Vehicle

May 30, 2023 By Becky Wilson

How to Compare Guaranteed Investment Certificates

May 30, 2023 By Paul Williams Short

Why Is It Important To Tell A Story In Your Marketing?

May 26, 2023 By Dan Alvin

The Power of Collaboration: Why It’s Essential for Small Businesses

May 25, 2023 By SmallBizClub

Footer

About Us

Small Biz Club is the premier destination for small business owners and entrepreneurs. To succeed in business, you have to constantly learn about new things, evaluate what you’re doing, and look for ways to improve—that’s what we’re here to help you do.

  • Facebook
  • LinkedIn
  • RSS
  • Twitter

Copyright © 2023 by Tarkenton Institute, Inc. All Rights Reserved | Terms | Privacy