SALT Strategies

No Time for Wayfair Complacency

checklist 2077020 960 720 - No Time for Wayfair Complacency

According to a recent survey of 1,150 accounting professionals, business owners are becoming increasingly more comfortable with the ramifications of Wayfair on their businesses compared to the first half of the year. However, they should not get complacent just yet. Even though the Wayfair ruling was made over a year ago, its continued effects on businesses should not be ignored.

During a recent webinar hosted by MWE, we summarized the third quarter update of state tax developments – i.e. new legislation, decisions, regulations, and potential issues pertaining to state and local tax. We also took a deeper look at Wayfair 18 months after it historically set the sales tax nexus world on its head. During our webinar, we collected the opinions of accounting professionals and business owners across the United States on the “Wayfair-effect” upon their clients and/or businesses.

The responses to our polling questions found that despite the initial attention that Wayfair received, it appears that intense planning and compliance considerations surrounding Wayfair provisions have since been relegated to the “routine” status for many.

When our attendees were posed as to which to state and local tax issues are high on their list of concerns, the majority of survey respondents now cite either state and local tax compliance and examinations (33%) or keeping up with state tax legislation (28%) as their primary concerns. Wayfair came in third, with only 21 percent of respondents saying it was the state and local tax issue of greatest concern.

While Wayfair may appear to be old news, since late 2018, approximately 20 additional states have adopted economic sales tax nexus provisions similar to those held constitutional in Wayfair. Therefore, even if a company completed their Wayfair analysis at the end of last year, it is highly recommended that the company prepare a “Wayfair II” analysis as states continued throughout the end of 2018 and into 2019 to adopt Wayfair nexus provisions and establish more sophisticated guidance as to the numerous aspects of such provisions.

Despite the potential need for additional Wayfair II analysis, only 11 percent of respondents to our survey stated they have completed a Wayfair analysis for all states, while 31 percent answered they weren’t sure if they/their clients presently have sales into states in which they are not filing sales tax returns.

As all but two states, Florida and Missouri, have adopted some form of Wayfair economic nexus, it is imperative that companies stay on top of the numerous technical and procedural issues presented by these states’ nexus provisions. Wayfair is not a “one and done” issue. It will continue to have potentially onerous ramifications to businesses nationwide going into 2020 and beyond.


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