Michaela Merz

USA: Invitation to a round table event to discuss the U.S. Supreme Court decision in South Dakota v Wayfair Inc

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I am pleased to invite you to the planned round table discussion on the impact of the S Dakota v Wayfair Inc decision on foreign traders into the US.

Date: Monday 6th August 2018
Time: 10:30am to 4pm
PWC Embakment Place Office, London

What did the Wayfair judgment decide?

This decision will  impact foreign sellers of products and services into the US and overturns longstanding Sales and Use Tax collection law.

The court decision  allows states to imposes a sales tax collection obligation on remote sellers without a physical presence in the state. In most states, the seller must have  annual state sales exceeding either $100,000 or 199 transactions (i.e., “economic nexus”). By removing the physical presence requirement the Court’s decision allows states to impose sales tax collection obligations on sellers without physical presence.

What is the impact on foreign sellers of products or services into the U.S?

Contrary to common belief, income tax treaties between foreign governments and the U.S. federal government do not protect foreign companies from sales tax collection responsibilities in any U.S. state.

Due to Wayfair’s outcome, states will be able to impose sales and use tax collection obligations on remote businesses much more easily going forward. Foreign companies selling products or services into the U.S. need to be well aware of this historic change to the nexus requirements. If vendors do not already have a sales tax (or income tax) filing responsibility in certain states, that is likely to change. They will face multiple new challenges, from taxability determinations to new filing requirements. With this burden comes the need to assess and implement procedures and technology to manage the change, such as updating billing systems and infrastructure with newer tax software.

Retroactive application also remains a concern in (most) states lacking specific laws preventing the collection of sales tax related to prior years. The Wayfair decision mentions retroactivity as a concern, but provides no relief, rather it concedes these issues may arise in some later case.

At the round table event we’ll discuss next steps

Should all foreign companies  review their U.S. nexus footprint post-Wayfair? Would a  50-state matrix covering each of the state nexus thresholds enable companies to better evaluate their go-forward sales and use tax responsibilities? Following this analysis, what steps should be taken regarding  remediation, tax registrations, updating tax software and billing engines, and future sales and use tax compliance filings.

The event will be lead by our US sales and use tax partner, Brian Goldstein and director, Rob Morse. And we’ll be joined by our technology solutions and ERP specialist, James Minniman for what should be an informative and lively discussion.

 

If you are interested in joining us either in London or by video conferencing, please contact: katharina.hegyes@ch.pwc.com

 

Bildquelle: Thorben Wengert / Pixelio.de

 

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