Teri Grahn, CMI
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June 16, 2020 - It has been about two years since the U.S. Supreme Court ruled on South Dakota vs. Wayfair. With the year 2020 featuring other, more challenging news for state coffers, states may start taking a harder look at economic activity that meets or exceeds economic nexus thresholds as defined by the 2018 ruling.
“Due to States' recent decline in tax revenue, I believe Revenue Departments will be increasing their mailings of nexus questionnaires and their initiation of audits,” said Teri Grahn, Redpath's sales and use tax service area leader.
To this point, there has been neither a significant amount of auditing of economic activities for nexus—nor have there been sweeping initiatives to ensure that companies are compliant across the board.
However, with the strain of the pandemic this year increasing the likelihood that states will react with audits, it would be good to review the following chart.
State |
Economic Thresholds |
Determination - Time Period |
Marketplace Nexus |
|
Alabama |
10/1/2018 - 250,000 retail sales |
previous calendar year |
1/1/2019 |
|
Alaska (Locals) |
3/9/2020-$100,000 gross and 100 transactions |
previous calendar year |
NA |
|
Arkansas |
7/1/2019- $100,000 taxable sales or 200 transactions |
in previous or current calendar year |
7/1/2019 |
|
Arizona |
10/1/2019 - $200,000 gross in 2019, $150,000 in 2020 & $100,000 after |
in previous or current calendar year |
10/1/2019 |
|
California |
4/1/2019 - 500,000 gross sales |
in previous or current calendar year |
10/1/2019 |
|
Colorado |
5/1/2019 - 100,000 retail sales |
in previous or current calendar year |
10/1/2019 |
|
Connecticut |
7/1/2019 $100,000 gross sales AND 200 transactions (12/1/2018 - 250,000 retail sales AND 200) |
preceeding 12 month period |
12/1/2018 |
|
Distict of Columbia |
1/1/2019 - 100,000 retail sales or 200 transactions |
in previous or current calendar year |
4/1/2019 |
|
Florida |
NA |
NA |
NA |
|
Georgia |
1/1/2019 - $250,000 retail sales or 200 transactions (1/1/20 $100,000 or 200) |
in previous or current calendar year |
4/1/2020 |
|
Hawaii |
7/1/2018- $100,000 gross sales or 200 transactions |
in previous or current calendar year |
1/1/2020 |
|
Illinois |
10/1/2018- $100,000 retail sales or 200 transactions |
preceding 12 month period |
1/1/2020 |
|
Indiana |
10/1/2018- $100,000 gross sales or 200 transactions |
in previous or current calendar year |
7/1/2019 |
|
Idaho |
6/1/2019 - $100,000 gross sales |
in previous or current calendar year |
6/1/2019 |
|
Iowa |
1/1/2019 - $100,000 gross sales or 200, (7/1/2019 $100,000) |
in previous or current calendar year |
1/1/2019 |
|
Kansas |
10/1/2019 - No thresholds |
NA |
NA |
|
Kentucky |
10/1/2018 - $100,000 retail sales or 200 transactions |
in previous or current calendar year |
7/1/2019 |
|
Louisiana |
7/1/2020 - $ 100,000 gross sales or 200 transactions- |
in previous or current calendar year |
NA |
|
Maine |
7/1/2018 - $100,000 gross sales or 200 transactions |
in previous or current calendar year |
10/1/2019 |
|
Maryland |
10/1/2018 - $100,000 gross sales or 200 transactions |
in previous or current calendar year |
10/1/2019 |
|
Massachusetts |
10/1/2017 - $500,000 gross sales AND 100 transactions (10/1/19 $100,000) |
previous calendar year |
10/1/2019 |
|
Michigan |
10/1/2018- $100,000 gross sales or 200 transactions |
in previous or current calendar year |
1/1/2020 |
|
Minnesota |
10/1/2018- $100,000 retail sales or 100, (10/1/19 $100.000 or 200) |
over a 12 month period |
10/1/2018 |
|
Mississippi |
9/1/2018- $250,000 gross sales |
preceeding 12 month period |
NA |
|
Missouri |
NA |
NA |
NA |
|
Nebraska |
1/1/2019 - $100,000 gross sales or 200 transactions |
current calendar year |
4/1/2019 |
|
Nevada |
11/1/2018 - $100,000 retail sales or 200 transactions |
in previous or current calendar year |
10/1/2019 |
|
New Jersey |
11/1/2018 - $100,000 retail sales or 200 transactions |
in previous or current calendar year |
11/1/2018 |
|
New Mexico |
7/1/2019- $100,000 taxable sales |
in previous or current calendar year |
7/1/2019 |
|
New York |
6/22/2018- $ 500,000 gross AND 100 - (was 300,000 and 100) |
in preceding 4 quarters |
6/1/2019 |
|
North Carolina |
11/1/2018- $100,000 gross sales or 200 transactions |
in previous or current calendar year |
2/1/2020 |
|
North Dakota |
10/1/2018 - $100,000 taxable sales |
in previous or current calendar year |
10/1/2019 |
|
Ohio |
1/1/2018 - $500,000 gross, (8/1/2019 $100,000 or 200) |
in previous or current calendar year |
9/1/2019 |
|
Oklahoma |
11/1/2019- $100,000 taxable sales |
in previous or current calendar year |
4/10/2018 |
|
Pennsylvania |
7/1/2019 - $100,000 gross sales |
in the 12 previous months |
7/1/2019 |
|
Rhode Island |
7/1/2019 - $100,000 gross sales or 200 transactions |
in preceding calendar year |
7/1/2019 |
|
South Carolina |
11/1/2018 - $100,000 gross sales |
in previous or current calendar year |
4/26/2019 |
|
South Dakota |
11/1/2018 - $100,000 gross sales or 200 transactions |
in previous or current calendar year |
3/1/2019 |
|
Tennessee |
10/1/2019 - $500,000 retail sales |
preceeding 12 month period |
10/1/2020 |
|
Texas |
10/1/2019 - $500,000 gross sales. |
preceeding 12 month period |
10/1/2019 |
|
Utah |
1/1/2019 - $100,000 gross sales or 200 transactions |
in previous or current calendar year |
10/1/2019 |
|
Vermont |
7/1/2018 - $ 100,000 gross sales or 200 transactions |
over any 12 month period |
6/1/2019 |
|
Virginia |
7/1/2019 - $100,000 retail sales or 200 transactions |
in previous or current calendar year |
7/1/2019 |
|
Washington |
10/1/2018 - $100.000 of retail sales or 200, (3/14/19 $100,000) |
in previous or current calendar year |
1/1/2018 |
|
West Virginia |
1/1/2019 - $100,000 gross sales or 200 transactions |
previous calendar year |
7/1/2019 |
|
Wisconsin |
10/1/2018- $100,000 gross sales or 200 transactions |
in previous or current calendar year |
1/1/2020 |
|
Wyoming |
2/1/2019 - $100,000 gross sales or 200 transactions |
in previous or current calendar year |
7/1/2019 |
Important Steps to Take
- Analyze sales and transactions by state with threshold tests;
- Software system assessment—companies need a system to handle up to 10,000 state & local jurisdictions;
- Determination of the taxability of products, services, or customers;
- Identifying needed procedures to have in-place; from invoicing to exemption certificate management and beyond; and
- The registration and filing of returns.
It is important to work with an expert to go through everything you need to know for your specific situation including details about effective dates, thresholds, determination time periods, and past liability exposure for all of the different states that apply to you.
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