New Economic Presence Nexus Standards for Foreign Remote Sellers: Impact of Wayfair Holding on Non-U.S. Companies

Reporting and Remittance Duties on Offshore Entities, Marketplace Rules and Registration Obligations

A live 110-minute CPE webinar with interactive Q&A


Tuesday, February 5, 2019 (in 12 days)

1:00pm-2:50pm EST, 10:00am-11:50am PST

or call 1-800-926-7926

This webinar will offer tax advisers to foreign companies with a practical evaluation of the impact of the Supreme Court decision in South Dakota v. Wayfair on non-U.S. based sellers of goods and providers of services. The panel will discuss the ramifications of the Court's overturning of the physical presence rule and detail potential expanded sales and use tax and other state and local tax obligations for offshore businesses meeting state economic presence nexus standards.

Description

The U.S. Supreme Court's decision in South Dakota v. Wayfair dramatically expands the reach states may exercise for tax purposes over remote sellers that conduct sales but do not have a "physical presence" within the state. While most of the attention to Wayfair is on the impact of U.S. companies with sales in multiple states, the holding--as well as the statutory approach taken by several states--likely creates new tax obligations for non-U.S. companies carrying on U.S. remote sales and provision of services.

Wayfair reverses the standard set in Quill, which, on the basis of the Commerce Clause,prevented a state from asserting sales and use tax jurisdiction over remote sellers who did not maintain sufficient "physical presence" within the state. With the rise of internet commerce, some states explicitly challenged the Quill standard, passing laws that asserted taxing authority over sellers with "economic presence" in the state. In Wayfair, the Court endorsed this economic presence nexus standard under the Commerce Clause.

The ruling affects all sellers of goods and services who make sales into a state where they lack a physical presence. Absent legislation or other factors, this holding likely will impact non-U.S. companies that engage in remote sales sufficient to create an economic presence. Tax advisers to offshore companies must recognize the potential new sales tax collection, remittance and filing obligations, and state income, gross receipts tax and franchise tax obligations, that Wayfair, and the state legislative initiatives resulting from the ruling, will create.

Listen as our expert panel provides a practical guide to the impact of Wayfair and the new economic presence rules on foreign sellers engaged in remote commerce in states imposing sales and use tax on internet sales.

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Outline

  1. Wayfair holding and economic presence rules for creating state tax nexus
  2. Existing economic nexus statutes and various states' approaches
  3. Impact on non-U.S. based remote sellers
  4. Reconciling permanent establishment rules with state nexus principles
  5. Possible new registration requirements
  6. State income, gross receipts and franchise tax obligations

Benefits

The panel will discuss these and other critical topics:

  • How various states are seeking to apply economic presence nexus to remote sellers
  • The additional safeguards provided to international sellers
  • The possible application of economic nexus standards on additional taxes beyond sales and use taxes
  • Likely means by which states may enforce sales and use tax obligations on non-U.S. remote sellers subject to tax under economic presence

Faculty

Dillon, Michael
Michael T. Dillon

President
Dillon Tax Consulting

Mr. Dillon is an attorney specializing in multistate sales and use tax matters for multistate and multinational...  |  Read More

Dion, Sylvia
Sylvia F. Dion, CPA

Founder & Managing Member
PrietoDion Consulting Partners

Ms. Dion's firm specializes in providing SALT consulting and compliance Services to companies throughout the U.S....  |  Read More

Eisenstein, Martin
Martin Eisenstein

Managing Partner
Brann & Isaacson

Mr. Eisenstein is one of the nation’s leading experts in state and local taxation of information...  |  Read More

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