SALT Strategies

State Economic Nexus Update – 2017 Could Be An Active Legislative Year

MWE Headshots Thumbnail JoePizzimenti - State Economic Nexus Update – 2017 Could Be An Active Legislative YearWhile preparing a follow up to my article earlier this week, Economic Expectations Push the DOW to Record High as States Seek Economic Nexus To Boost Their Coffers, I came across a piece written the next day in Multistate Insider, Economic Nexus is the Most Prevalent Type of Sales Tax Compliance Legislation This Year”. It confirmed my belief that states will aggressively pursue legislation this year that ignores the “physical presence” requirement set forth by Quillor at the very least places such states in a position to have Economic Nexus provisions in place when (or if) the U.S. Supreme Court overturns the Quill decision.

It also provides an excellent summary of the pending 2017 Sales Tax “Compliance Legislation” with the respective states’ pending bill numbers.

Stay Ahead of the States’ Economic Nexus Curve – Gather Intel and Use It Well

Will the South Dakota Economic Nexus provisions provide the basis for litigation that will result in the overturning of Quill? Will the Due Process Clause come to the rescue to preclude the States’ attempt to assert sales tax nexus and potentially personal liability on the responsible persons of remote sellers that have no physical presence, affiliate or click through nexus in the state? Will there finally be federal legislation that will find the appropriate balance between the States’ concerns about the growing remote seller marketplace and our Constitutional Rights under the Due Process Clause? 2017 holds the potential to address one or more of these critical questions.

How should multistate businesses and their advisors prepare or contend with the potential dynamics in Sales Tax nexus during 2017?

The intel and insight provided by my “expectations” article can help your company or your clients stay ahead of the States’ Economic Nexus curve. However, just as the capture of U-570 and its Enigma Machine provided a great window of intelligence into a complex situation, it is how the British codebreakers at Bletchley used the intelligence gained from the Enigma Machine that made the difference in winning the war. We will continue to monitor as well as highlight the States’ Economic Nexus activities during 2017. Our focus will be to filter out the “noise” and “static” so as to separate the true intel from the “fake news” on this most dynamic issue to assist in your staying ahead of the State Economic Nexus curve.

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