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Business Law, Litigation, Litigation, Taxation law

To all clients who sell into the United States on the internet

Jun 28th, 2018

By Frank M. Schlesinger

In a five to four decision on June 21st the United States Supreme Court ruled that internet retailers can be required to collect sales taxes in states where they have no physical presence.

The previous governing case was Quill Corporation vs. North Dakota, which held that retailers that did not have a “substantial nexus”, namely, a physical presence in a state, were not required to charge that state’s sales tax.

In the latest case (South Dakota vs. Wayfair) the Supreme Court overruled the Quill case and now states that “Physical presence is not necessary to create a substantial nexus – substantial nexus can be achieved through a “pervasive internet presence””.

Please prepare for each American state to require retailers to commence collecting sales tax on sales into their states.  If you sell on-line, you may have to register for state sales tax, and you may have to collect the sales tax for the states into which you sell.  This will have the effect of making your products more expensive to purchasers.

Do not hesitate to contact us for more information.