Wayfair gives states greater power to tax: Are you ready?

States continue to selectively tax sales and services, making some goods and services taxable while others are not. The recent U.S. Supreme Court decision in the landmark case South Dakota v. Wayfair gives states even greater power to selectively require out-of-state retailers to collect sales tax on sales to in-state residents.

In the meantime, beginning July 1, many new state sales and use tax laws will take effect. Included are:

• Connecticut: Baby diapers and feminine hygiene products will be exempt  
  


• Indiana: Remote access to software will be exempt


• Kentucky: Remote sellers will need to register with the state if they make a certain amount of in-state sales. Kentucky will also tax:
  • Charges for installation or application in the taxable price of tangible personal property
  • New services including extended warranty services, janitorial services, landscape services, pet care services, and veterinary services
  • Tax pollution control equipment


• Louisiana: The state removes exemptions for manufacturers, property purchased for later lease, certain aircraft, and other suspended sales tax exemptions, in part or whole, and will allow the state’s additional 1% tax to expire  


• North Carolina: Mill machinery equipment used in manufacturing will be exempt 


• Wisconsin: Certain sales to state veterans organizations will be exempt

The takeaway 

With changing laws, evolving exemptions, multiple reporting requirements, and varying rates, sales and use tax compliance is only becoming more onerous on businesses, not less. The complexity of record-keeping for exempt transactions, remitting taxes and filing required forms accurately and on time is continuing to ratchet up, despite efforts in a number of states to simplify sales tax .

Protect your business investments with a sales and use taxability assessment. Request a free consultation with Judy Vorndran, lead state and local tax partner, to see how best to shore up your tracking systems to minimize errors and audit risk. 

Let’s talk tax

Judy Vorndran can be reached at jvorndran@taxops.com or 720.227.0093. Follow Judy on LinkedIn.