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Now is a Good Time to Review Your Wayfair Sales Tax Nexus Thresholds

November 24, 2020 by Colleen Netzell
State and Local Taxation

For states where you are not filing sales tax, review your 2020 sales into those states to determine if you are close to the Wayfair thresholds.  You may have to register and begin collecting sales tax by the beginning of 2021.

Most states’ thresholds are based on calendar year sales.  See the chart below.

If you exceed the threshold by 12/31/2020, you are responsible for collecting sales tax as of 1/01/2021.  Few states allow a transition period to register. 

Remember the states are hungry.  They have lost sales tax revenue from restaurants and bars and have increased expenditures due to additional medical costs.  In addition, more sales may have been made online directly rather than through stores.   We expect the states to be more aggressive in collecting tax from sellers.

Copeland Buhl can help you get set up to start collecting sales tax, analyze exposure for any uncollected tax and file voluntary disclosure applications, and establish protocols within your business to keep you in compliance.

Chart: Economic Nexus Summary