Worlds Collide: Predictions for Retail and Tax in 2019 and Beyond
2018 saw a major shift in retail. Yes, the phrase “major shift in retail” has been used quite frequently over the past few years, but the continued surge of e-commerce and emergence of new legislation like the Supreme Court’s decision in South Dakota v. Wayfair brought a completely new meaning to the phrase.
In June, the Supreme Court ruled that a remote seller’s “economic and virtual contacts” with a state could be sufficient to trigger sales tax nexus. The decision in South Dakota v. Wayfair represents an enormous change for retail sales tax: In addition to in-state sales, states now have the authority to tax remote sales. This means compliance just got even more difficult for retailers that sell online, including marketplaces and traditional e-commerce sites.
And with the Supreme Court decision in South Dakota v. Wayfair, the United States is only beginning to catch up when it comes to sales tax compliance and remittance in the 21st century and the era of e-commerce. Progressive countries including Brazil, Italy, Poland and, soon, Hungary are beginning to process tax in real time. The U.S. is far behind when it comes to calculation of sales tax.