PODCAST: The impact of Wayfair one year later

Written on Nov 14, 2019

By Jessica Salerno, OSCPA senior content manager

More than a year after Wayfair v. South Dakota, a sales tax expert said states are still scrambling to figure out how to implement the Supreme Court ruling.

“It varies widely as to what states are doing,” said Kathy LaMonica, a senior manager at Rea & Associates, an Ohio CPA Proud organization. “And even they're not equipped yet on how to handle it when you're registering… So, it's really challenging to try to get it through with all the differences in the states.”

LaMonica joined The State of Business podcast’s most recent episode and said since the ruling last June most states – except for Florida and Missouri – have come out with their own economic nexus rules. During this time, many states have started to roll back some of the standards they initially put in place, she said, as they figure out what makes sense for large and small businesses.

Proper compliance of the ruling continues to be an issue with clients, LaMonica said. The businesses that she sees struggling the most are those who sell in traditional means and online.

“You have the burden of the internet sales that you are creating and nexus plus your own sales and you have to manage the compliance of both of those,” she said. “And do you have the right systems in place to handle it?”

LaMonica said many firms don’t have dedicated state and local tax staff, which can make it difficult when there isn’t a devoted team to understand the complications of a ruling like this. She regularly gets questions from other practitioners on technology, such as different service providers available, companies that offer third party sales tax software and exemption certificate management.

In the future, she suggested CPAs cover all the bases with their clients during an annual review. Discuss what they’re doing in other states, such as payroll, selling or services.

“You’ve got to be proactive and ask the questions,” she said. “Having a list of potential state and local tax triggers is really important. And if you don't have that experience, reach out to somebody who does because it's really easy to get it wrong.”

Listen to the episode now and check out other weekly episodes here.

Related:

ST 2001-01 – Sales and use tax, use tax nexus standards from the Ohio Department of Taxation (PDF)

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