U.S. Supreme Court Case, South Dakota v. Wayfair
Recently the U.S. Supreme Court Case, South Dakota v. Wayfair, overturned a previous case which prevented state and local governments from collecting sales tax from out of state vendors. The new law passed this year in Georgia (HB 61) allows local governments to take advantage of this new court ruling beginning January 1.
After overruling the previous physical-presence requirement, the Supreme Court held that the South Dakota law – which applies sales tax collection duties only to out-of-state vendors who deliver more than $100,000 in goods or services into the state or engaged in 200 or more transactions with South Dakota buyers annually – is legally permissible because it applies only to vendors whose activities have a “substantial nexus” with the state.
With specific application to Georgia, this decision likely paves the way for implementation of House Bill 61, passed and signed into law this year. HB 61 creates a process similar to South Dakota’s, with an even higher threshold: $250,000 in sales or 200 or more transactions. Beginning in January of 2019, such vendors will be required to either collect Georgia state and local sales taxes or provide purchasers with an annual tax statement reflecting their purchases, with a copy of that statement provided to the state. Once the Georgia Department of Revenue develops the necessary administrative procedures to enforce this new law, Georgia counties should begin to see increases in sales tax receipts.
Article provided by:
Clint Mueller, Legislative Director