New Wayfair Economic Nexus Provisions Go Into Effect July 1, 2019

July 1, 2019 marks the beginning of a new fiscal year for most states and introduces some new Wayfair economic nexus rules for remote sellers and marketplace facilitators doing business in Arkansas, New Mexico, Pennsylvania, Rhode Island, Tennessee and Virginia.

Arkansas – Remote sellers and marketplace facilitators exceeding $100,000 in sales or 200 individual transactions of tangible personal property, taxable services, digital code or specified digital products in the previous or current calendar year are required to register and collect sales tax.  Remote sellers who only make wholesale or non-taxable services are not required to register.

Connecticut – Effective July 1, 2019 Connecticut lowers their sales threshold from $250,000 to $100,000.  The current threshold is 200 Connecticut and gross receipts are $100,000 during the preceding 12 month period ending September 30.  The new threshold includes sales of both services and tangible personal property.

New Mexico – Remote sellers and marketplace facilitators making taxable sales in excess of $100,000 during the previous calendar year are required to register and collect sales tax.  Remote sellers who only make non-taxable sales in New Mexico are not required to register.

New York – Increases its sales threshold from $300,000 to $500,000.  The new threshold is 100 or more sales or facilitated sales of tangible personal property delivered in New York totaling $500,000 or more.  The new threshold is retroactive to June 21, 2018.

Pennsylvania – Economic nexus applies to all persons (remote sellers and marketplace providers) who in the previous 12 months made more than $100,000 in gross sales into Pennsylvania. All remote sellers and marketplace facilitators meeting the threshold are required to register and file returns regardless of whether their sales are taxable or non-taxable.  Pennsylvania’s use tax reporting requirements are still in effect for remote sellers and marketplace providers whose sales exceed $10,000 but are less than $100,000.

Rhode Island – From August 17, 2017 through June 30, 2019, remote sellers and marketplace providers who had $100,000 or more in gross revenue or 200 or more separate transactions in the immediately preceding calendar year had the option of registering and collecting or complying with use tax reporting requirements.  Effective July 1, 2019, remote sellers and marketplace providers will no longer have the use tax reporting option.  They will be required to register and collect tax on all taxable sales.

Tennessee – Remote sellers who regularly and systematically solicit consumers in Tennessee and have $500,000 of gross sales during the previous 12 months must register and collect the tax on all taxable sales.

Virginia –Remote sellers and marketplace facilitators who exceed $100,000 in retail sales or facilitate 200 or more separate retail sale transactions in the previous or current calendar year are required to register.