10 Steps to Ensure

Sales Tax Doesn't

Burn Down Your
Ecommerce Business
 Table of Contents

Preface: Don't Let Sales Tax Destroy

2
Your Ecommerce Business
1. Determine Sales Tax Nexus 4
2. Decide on Retroactively Filing
7
and Make a Strategic Plan
3. Register with Necessary States 8

4. Configure Sales Channels to Collect Sales Tax 9

5. Record the Collection of Sales Tax 11

6. Hold Sales Tax Funds in Separate Account 12

7. File and Pay Sales Tax 13

8. Automate the Sales Tax Process 13

9. Record the Payment of Sales Taxes 14

10. Keep up with Sales Tax Changes 16

Our Service Offerings 17

Appendix 19

10 Steps to Ensure Sales Tax Doesn’t Burn Down Your Ecommerce Business LedgerGurus.com 1
 Preface: Don't Let Sales Tax Destroy Your
Ecommerce Business

Ecommerce sales tax is a BEAST. A beast with a mean growl, sharp claws, and putrid
breath...yeah, it’s scary.

Facing the beast of ecommerce sales tax is so challenging that many small- to
medium-sized businesses run and hide (and we don’t blame you).

The problem is that avoiding sales tax can threaten business survival and success.

States expect you to cough up sales tax whether you collected it at the time of sale or
not. If they audit your company and find that you are not complying to sales tax laws,
retroactively paying taxes (and penalties) can end up being a lot of money out of your
pocket.

Because of this, ecommerce businesses cannot mess around with sales tax
compliance. We have seen it significantly set companies back, and in some cases,
destroy companies.

So, here’s the deal...

We’re not saying all this to scare you but to help you see how serious this is.

Also, we’re not going to leave you in this mess without offering help. We have several
levels of services available to help you with exactly where you are at.

We go into more detail on these services on the Service Offerings page later in this
download, but here is a quick reference guide.

10 Steps to Ensure Sales Tax Doesn’t Burn Down Your Ecommerce Business LedgerGurus.com 2
 Preface: Don't Let Sales Tax Destroy Your
Ecommerce Business

SERVICE WHAT YOU WHAT WE OFFER PRICE HOW TO

OFFERING NEED ACCESS
DIY with a Guidance Free resources FREE CLICK HERE
<$500k Annual Revenue

Checklist Downloads for Sales Tax

Blog posts Resources
YouTube videos

Sales Tax Help getting A sales tax guru to: $ CLICK HERE
Set-Up started Set up sales channels to for more
Consultation correctly collect sales tax details
(For businesses Answer registration, collection,
launching a new and remittance questions
platform or CLICK HERE
Show how to monitor nexus
starting a new to schedule
footprint
store)

General Sales Questions A sales tax guru to: $ CLICK HERE

Tax answered Answer any sales tax for more
Consultation questions you have details
Answer registration, collection,
and remittance questions
CLICK HERE
Answer questions about filing,
to schedule
nexus, exemption certificates,
use tax, etc.
>1M Annual Revenue

Nexus Analysis In-depth Complete nexus analysis to $$ CLICK HERE

nexus determine your sales tax expo- to schedule
information sure.

Schedule a call to learn more.

Full-Service Complete Too many to list here. Schedule $$-$$$ CLICK HERE
(Depending
sales tax a call to learn more. on services
to schedule
takeover you choose)

Read the following 10 Steps. Look at our service options available and decide where you are and what
level of help you want/need.
It is time to take steps toward being sales tax compliant. You can do this, and you CAN beat the sales
tax beast.
So, let’s continue...

10 Steps to Ensure Sales Tax Doesn’t Burn Down Your Ecommerce Business LedgerGurus.com 3
 1. Determine Sales Tax Nexus

Determining sales tax nexus is one of the most complicated steps of sales tax compliance. It is best
left to the experts but having a basic understanding can help you make important strategic
decisions.

Nexus is a term often used in legal and accounting jargon. Nexus is simply a connection or series of
connections linking two or more things.

For sales tax, nexus (or sales tax nexus) is about determining in what states a business has strong
enough connections to be legally required to remit sales tax.

There are four main rules that may create sales tax nexus for a company in any given state:

1
Old nexus – A business must pay sales tax in states where it has a “physical presence.”

This was the nexus standard until June 2018 when the South Dakota v. Wayfair ruling
re-established nexus standards.

This old standard still stands in effect. A variety of factors can determine having a “physical
presence,” including but not limited to, the following:
a. Employees
b. Office locations
c. Warehouse locations
d. Inventory storage
e. Third-party representatives

2
Fulfillment by Amazon (FBA) nexus – This is really an extension of the “inventory storage”
listed above.

FBA nexus is important to note separately because many businesses are unaware that they
have FBA nexus. All states, except IL, NY, and AZ consider your stock held in an Amazon
warehouse enough of a presence to create nexus in their state.

A business using FBA services needs to determine in which Amazon warehouses its inventory
has been or is being stored.

You can find where your inventory is being stored on Amazon Seller Central or tools like here-
stock.com and salestaxanaly-sis.com can help you as well.

An important note: Amazon is collecting sales tax for you in most states due to marketplace
facilitator laws (watch our video here to learn more). But remember that if FBA creates nexus
for you in a state, and you sell on other channels, you’ll want to collect that sales tax on your
other channels.

10 Steps to Ensure Sales Tax Doesn’t Burn Down Your Ecommerce Business LedgerGurus.com 4
 1. Determine Sales Tax Nexus

3
Economic nexus laws – This is the biggest change since the South Dakota
3
v. Wayfair ruling in June 2018. States are now able to tax businesses
based on “economic activity” within their state.
You will need to collect and remit sales tax in states where your business:
(1) meets a certain dollar amount of annual sales within that state
AND/OR
(2) meets a certain number of annual transactions within that state.
Economic nexus laws get complicated because not all states have these
laws, and the annual sales/transactions thresholds vary between states.

Here are some tools when navigating economic nexus laws:

a Sales Channels – A business can gather sales data filtered by state
on the backend of its sales channels. Remember to gather and
combine data for every sales channel used.
You will be able to see in which states you have a substantial number
of sales and/or transactions. You can then check those states for
economic nexus laws (see map below: “Economic Nexus by State.”
Also see table in “Appendix” section).
b TaxJar, Taxify, Avalara and other tax automation software – These
tools are discussed more in a later step but are extremely helpful in
determining sales tax nexus.
By connecting to a business’s sales channels, these tools identify in
what states a business is required to pay sales tax. They also have
free tools to help you determine economic nexus.
Economic Nexus by State
WA
MT ME
ND
OR MN
VT
NH
ID MA
SD WI NY
WY MI RI
CT
IA PA
NV NE NJ
OH
UT IL IN DE
CA CO WV
KS VA MD
MO KY
NC
TN
AZ NM OK AR SC
MS AL GA In Effect
LA
TX
AK No Current Laws
FL

HI

*For a table of economic nexus laws and thresholds by state, refer to the Appendix at the end of this white paper.

10 Steps to Ensure Sales Tax Doesn’t Burn Down Your Ecommerce Business LedgerGurus.com 5
 1. Determine Sales Tax Nexus

4
Click-Through Nexus – This nexus is best explained with a simple example.

Imagine you are a shoe company based in California.

You have an affiliate contract with a sports magazine company based in

Oregon. On their website, the sports magazine company promotes your
shoes and has a link to your website. You give them a little kickback for each
of your shoe sales that come from their website.

You end up earning a considerable number of sales through this affiliate

contract...and just like that, you now have nexus in the state of Oregon!

Basically, you have click-through nexus if you give commissions or

kickbacks to another company or person that pushes customers from their
site to your site.

This nexus will be in their operating state.

But not all states have click-through nexus laws. States that do have
click-through nexus laws have differing thresholds of referral sales that your
company needs to meet before legally having nexus.

For click-through nexus, it is best to rely on sales tax experts.

In addition to these main nexus laws, other laws exist that may also create nexus for
your business. It is wise to consult with a sales tax expert to make sure you have
covered all your bases.

10 Steps to Ensure Sales Tax Doesn’t Burn Down Your Ecommerce Business LedgerGurus.com 6
 2. Make a Strategic Plan for Retroactive
Filing

Discovering you owe a huge pile of past sales tax can be horrifying and debilitating.
After determining sales tax nexus for past and current years, a business needs to make
a strategic decision for retroactively paying owed taxes.

Keep in mind, the biggest compliance cost can be registering and filing sales tax
quarterly or yearly. This (in addition to sales tax payments out-of-pocket) can cost
$50K-$100K if you are registering and filing in about 40 states, potentially creating
serious problems for small- to medium-sized businesses.

Because of the risks involved, we highly recommend working with a sales tax
consultant to make a strategic plan for sales tax compliance.

When making your strategic plan, consider:

1
Current v. past nexus rules – Although you may currently owe
sales tax in a state, you may not legally owe taxes in past
years, based on when certain nexus laws became effective.

Pay attention to when economic nexus laws became effective

in each state (check the appendix for an updated list of the
laws in each state and effective dates).

2
Business survival – The amount owed, along with
penalties, may be too much for a business to handle. If
this is your situation, meet with a sales tax consultant
on the best way to move forward.

This step is about risk management and business survival. Consulting with a sales
tax consultant will be your best option for a good sales tax compliance strategy.

10 Steps to Ensure Sales Tax Doesn’t Burn Down Your Ecommerce Business LedgerGurus.com 7
 3. Register with Necessary States

A business needs to register for a sales tax permit in each state before collecting and
remitting sales tax (both retroactively and currently). In fact, it is illegal to collect sales
tax from customers in a state before registering for a sales tax permit.

On average, registering with a state takes about 30-60 minutes, depending on the state.

Here’s the step-by-step process for a typical state:

1 Gather company information (FEIN, address, owner’s

information, suppliers’ information, references, NAISC, etc.)

2 Visit the state’s Department of Revenue website.

3 Search and click on “sales and use tax.”

4 Register your business.

FYI – It typically takes states 10-15 business days to process registrations.

10 Steps to Ensure Sales Tax Doesn’t Burn Down Your Ecommerce Business LedgerGurus.com 8
 4. Configure Sales Channels to Collect
Sales Tax
It is a common mistake to forget to configure every sales channel a business sells on. Consequently,
many ecommerce businesses get blindsided when they must pay sales tax but never collected it from
customers.

This can be avoided by double-checking to make sure ALL your sales channels are configured to
automatically collect sales tax from customers.

Note - For this step, a business will need to complete steps one and three of this paper and have state
registration numbers ready.

Keep in mind that some channels are more difficult to configure than others. When a business
decides what channels to sell on, it should consider the ease of working with channels to collect and
remit sales tax.

Amazon and Shopify are the most common sales channels, so we have included the step-by-step
processes below.

Amazon (5-10 minutes for initial setup) :

1 Login to Amazon Seller Central

2 Go to settings > tax settings

3 Add the state(s) that you already registered. This only applies to FL KS and MO. All the
other states are greyed out because Amazon is automatically collecting and remitting
in those states.

4 Set taxability of shipping and gift wrapping

5 Add product code

6 Enroll in Amazon’s exemption program so Amazon can keep track of exemption

information

7 Acknowledge and save changes

It is important to note that Amazon is now collecting sales tax for you in most states due to
marketplace facilitator laws (watch our video here to learn more). As of 12/14/2020, FL, MO, and KS are
the only states you need to worry about setting up sales tax for on Amazon Seller Central, if you have
sales tax nexus in those states.

CLICK HERE for a guided video walk-through for Amazon.

10 Steps to Ensure Sales Tax Doesn’t Burn Down Your Ecommerce Business LedgerGurus.com 9
 4. Configure Sales Channels to Collect
Sales Tax

Shopify (10-20 minutes for initial setup) :

10 Steps to Ensure Sales Tax Doesn’t Burn Down Your Ecommerce Business LedgerGurus.com 10
 5. Record the Collection of Sales Tax

The accurate recording of sales tax is often overlooked. Although simple, many small
companies get it wrong. We recommend recording the collection of sales taxes at
least once a month. Here is a simple two-step process:

1
On the backend of your sales channels, pull a report that shows the amount of
sales tax collected from customers.
CLICK HERE to learn How to Find and Understand Your Amazon Sales Tax Report.
CLICK HERE to learn How to Find and Understand Your Shopify Sales Tax Report.

2 Record a journal entry based on the amount of sales tax collected.

Credit your sales tax liability account and debit your cash account.

Debit Credit

Cash $XXX

Sales Tax Liability $XXX

10 Steps to Ensure Sales Tax Doesn’t Burn Down Your Ecommerce Business LedgerGurus.com 11
 6. Hold Sales Tax Funds in Separate
Accounts

Although short, this step is IMPORTANT. Vitally

important.

The last thing you want is to come around to

remitting your sales taxes but not have enough
cash on hand to do so. (This happens more than
you would think.)

To avoid this scenario, we recommend

transferring collected sales tax to a separate
bank account on at least a monthly basis.

This bank account should be strictly devoted to

holding sales tax funds. Not doing so will give a
business a false sense of working capital.

10 Steps to Ensure Sales Tax Doesn’t Burn Down Your Ecommerce Business LedgerGurus.com 12
 7. File and Pay Sales Tax
Each state has different requirements on how often you must remit your sales taxes.

The frequency usually depends on the number of sales you have within that state. The
higher the number of sales, the more often you must file and remit taxes.

The time it takes to file and pay heavily depends on the state. The main factor
determining how long it takes is whether a state has a flat sales tax rate across
counties and districts.

Here is the general process for filing and paying:

1 Login to your States’ Department of Revenue website with the online

account you have already created in step 3.

2 Click on “File Return”.

3 Either upload a tax file from one of the automated sales tax software, or
manually input data to fill out the forms.

4 Review and Submit.

5
Make payments accordingly from your bank account holding only
sales tax funds (refer to step 6).

6 Save a copy of the payment and filing confirmation PDF each time you remit.
It is YOUR responsibility to show you have paid this if they ask.

8. Record the Payment of Sales Tax

Just as you recorded the collection of sales taxes on your books, do not forget to
accurately record the payment of sales taxes in your books. This should be
completed as often as you pay your sales taxes.

Debit your sales tax liability and credit your cash account (note this is the opposite of
the chart in Step 6).

Debit Credit

Sales Tax Liability $XXX

Cash $XXX

10 Steps to Ensure Sales Tax Doesn’t Burn Down Your Ecommerce Business LedgerGurus.com 13
 8. Automate the Sales Tax Process

Perhaps the most difficult part of sales tax compliance is not letting anything fall
through the cracks. This is difficult due to all the necessary steps and the different
timing of these steps.

Automating the process is essential. This can be done with free tools or with software
tools such as TaxJar, Taxify, and Avalara. Usually, it takes a combination of both.

As a rule of thumb - One way or another, you need a sales tax database to help you
calculate how much to collect from each customer.

Free Tools
A business can develop its own sales tax compliance process by using Excel,
task-management software, google calendars, and other similar tools.

Creating tasks on task-management software, along with calendar reminders (we

recommend creating a google calendar specifically for sales tax compliance), can be
an effective way to stay on top of everything.

Also, Shopify has a free in-house sales tax database. You can download it to calculate
how much sales tax you should collect from a customer.

Note - It serves as a calculation tool, but NOT a filing tool.

Software Tools
Once your sales tax compliance is complex enough, we highly recommend using a
sales tax automation software.

We use TaxJar and Taxify as they are friendly to small- and medium-sized businesses.
Avalara is great option for larger companies.

These software options will connect to your sales channels and other
applications/software to do the following:
Automatically collect sales tax based on current nexus laws
Provide sales tax reports for filing
Automatically file and pay on time (usually at an additional cost)
CLICK HERE for a comparison video for these 3 apps.

10 Steps to Ensure Sales Tax Doesn’t Burn Down Your Ecommerce Business LedgerGurus.com 14
 9. Record the Payment of Sales Taxes

TaxJar Taxify Avalara

Acumatica, Amazon, Amazon, eBay, 700+ accounting
BigCommerce, eBay, Magento, Oracle systems, ERP and
ecwid, Etsy, Magento, NetSuite, PayPal, CRM providers,
Supported Integrations Oracle NetSuite, PayPal, QuickBooks, Sap and ecommerce
QuickBooks, SalesForce, Silver Partner, platforms
Shopify, Square, Shopify, Square,
Squarespace, Walmart, Xero, other sales tax
WooCommerce software like TaxJar

$19 (up to 200 orders $47 (up to 1,000 $249 Annual

Monthly Starting Price per month) transactions) + subscription +
$27/return (State or $25/return
local return filing)

Small- to medium-sized Small- to medium-sized Large corporations

Targeted Customer eCommerce companies eCommerce companies

Ratings (Capterra) 5/5 Stars

7
4/5 Stars
8
4.5/5 Stars 9

7 https://www.capterra.com/p/163419/TaxJar/#reviews
8 https://www.capterra.com/p/146595/Taxify/
9 https://www.capterra.com/p/75673/AvaTax/

10 Steps to Ensure Sales Tax Doesn’t Burn Down Your Ecommerce Business LedgerGurus.com 15
 10. Keep Up With Sales Tax Changes

A business’s sales tax nexus may change over time due to growth, marketing
strategies, and strategic decisions. State tax laws are also constantly changing.

To remain compliant, a business needs to keep up with this changing sales tax
environment.

The easiest way to do so is to use a sales tax automation software combined with an
ecommerce accounting company or person. Your accountant will be crucial in not only
the integration and management of your sales tax software, but also multiple other
software to accurately automate your accounting efforts.

Please contact LedgerGurus if you have further questions.

10 Steps to Ensure Sales Tax Doesn’t Burn Down Your Ecommerce Business LedgerGurus.com 16
 Our Service Offerings

DIY with a Checklist

If your business is still small and you want to take care of sales tax on your own, we
have given you 10 steps to follow to make sure you are set up correctly and sales tax
compliant.

We also have a lot of free content available to help you – videos, blogs, downloadable
resources. There are links scattered throughout this PDF.

You can also refer to the Sales Tax page on our website.

Sales Tax Set-Up Consultation (for Small Sellers)

For those who want the comfort of knowing they are sales tax compliant from the
beginning.

One of our sales tax gurus will:

Walk you through setting up your sales channels to accurately collect sales
tax from customers.
Confirm which states you have nexus in
Give sales tax registration, collection, and remittance guidance
Answer any other questions you have
CLICK HERE to learn more about the consultation service options.
CLICK HERE to schedule.

General Sales Tax Consultation

Sales tax is complicated and it’s quite common to have LOTS of questions, even after
you are collecting and remitting to the states. Make sure you are on the right track by
talking to a guru.

During this consultation, one of our sales tax gurus can:

Answer any sales tax-related questions you have.
Determine which states you have nexus in
Give guidance on sales tax registration, collection, and remittance
Discuss the benefits of outsourcing your ongoing sales tax needs
CLICK HERE to learn more about the consultation service options.
CLICK HERE to schedule.

10 Steps to Ensure Sales Tax Doesn’t Burn Down Your Ecommerce Business LedgerGurus.com 17
 Our Service Offerings

Sales Tax and Liabilities Nexus Analysis

As we mentioned earlier, because of the complexity of determining nexus, we offer a
sales tax and liabilities nexus analysis for ecommerce businesses. It is a fantastic way
to get your business on the road to sales tax compliance.
Our sales tax gurus can:
Go into your sales channels to pull determining data
Tell you which states your business has hit the economic threshold in (see
Appendix for these thresholds) and which ones are getting close
Tell you potential unpaid taxes that are owed and associated fees/penalties
Go over your sales tax exposure with you
Make sure you know how often you must file
Give advice on strategies
You are a good fit for the analysis if the following applies:
You are selling more than $1M/year online, or your sales are rapidly increasing
You are unsure in what states you should be collecting sales tax
You are not registered in and remitting sales tax to multiple states, but know
you should be
You are worried that states may come after your business? (this is happening
at an increasing rate)
CLICK HERE to schedule a discovery call to see if this option is right for you.

Full-Service
If your business is nearing $1M in annual sales, we offer full-spectrum, ongoing sales
tax services.
We have an entire team here at LedgerGurus that can:
Take over your sales tax process to help ensure full compliance
Run a nexus analysis
Handle the filing and remitting of back taxes and fees/penalties
Register for sales tax permits
Set up channels & connect tools for automation
Monitor sales tax tools
File and remit sales tax
Let our gurus take care of all this so you can focus more of your valuable resources on
growing your business.

CLICK HERE to schedule a discovery call to see if this option is right for you.

10 Steps to Ensure Sales Tax Doesn’t Burn Down Your Ecommerce Business LedgerGurus.com 18
 Appendix Economic Nexus: State Thresholds and Laws

State Threshold Registration Information Date References

Alabama $250K Unspecified how soon to 10/01/19 Tax Law
register after crossing
threshold. FAQs

Alaska $100K OR 200 No statewide sales tax, but many Varies by Alaska
transactions local governments levy taxes. district. Remote
Register within 30 days of a local Sales Tax
tax code being adopted OR
Info Portal
crossing threshold.

Arizona $100K Register by 1st day of the 10/01/19 Tax Law

month that starts 30 days after
crossing threshold.

Arkansas $100K OR 200 Unspecified how soon to 07/01/19 Tax Law

transactions register after crossing threshold.
Could be as early as next Resources
transaction.

California $500K Register and collect on the day 04/01/19 Tax Law
threshold is crossed -
AGGRESSIVELY ENFORCING. FAQs

Colorado $100K Register and collect by 1st day 12/01/18 Tax Law
of the month that starts 90 days
after crossing threshold. Out of State
Businesses

Connecticut $100K and 200 Unspecified how soon to 12/01/18 Tax Law
transactions register after crossing amended General
threshold, but still 07/01/19 Tax Law
AGGRESSIVELY ENFORCING. House

Delaware N/A N/A N/A N/A

Florida $100K Unspecified how soon to register 07/01/21 Click here for
after crossing threshold. Could Dept of
be as early as next transaction. Revenue
Georgia $100K OR 200 Unspecified how soon to register 01/01/19 Tax Law
transactions after crossing threshold. Could
be as early as next transaction.

10 Steps to Ensure Sales Tax Doesn’t Burn Down Your Ecommerce Business LedgerGurus.com 19
 Appendix Economic Nexus: State Thresholds and Laws

State Threshold Registration Information Date References

Hawaii $100K OR 200 Register and remit by deadline 07/01/18 Amended
transactions for next periodic return after Tax Law
crossing threshold.

Idaho $100K Track sales and register 06/01/19 Tax Law

BEFORE crossing threshold to
begin collecting as soon as it’s
crossed.

Illinois $100K OR 200 Must register and remit by first 10/01/18 More Info
transactions day of next quarter after Tax Law
crossing threshold.
FAQs

Indiana $100K OR 200 Must register and collect 10/01/18 More Info
transactions immediately upon crossing
threshold. Tax Law

Iowa $100K Must register and collect on 01/01/19 More Info

1st day of month starting 30
days after crossing threshold. Tax Law

Kansas $100K Awaiting more clarification 07/01/21 More Info

from Dept of Revenue
about timing requirements. Tax Law

Kentucky $100K OR 200 Must register and collect on 10/01/18 More Info
transactions 1st day of month starting 30
days after crossing threshold. Tax Law

Louisiana $100K OR 200 Must register and collect 07/01/20 More Info
transactions within 30 days after crossing Tax Law
threshold.
FAQs

Maine $100K OR 200 Must register and collect 07/01/18 More Info
transactions immediately after crossing Tax Law
threshold - AGGRESSIVELY Amended
ENFORCING. Tax Law
Maryland $100K OR 200 Unspecified how soon to 10/01/18 Tax Law
transactions register after crossing
threshold.

10 Steps to Ensure Sales Tax Doesn’t Burn Down Your Ecommerce Business LedgerGurus.com 20
 Appendix Economic Nexus: State Thresholds and Laws

State Threshold Registration Information Date References

Massachusetts $100K Register and remit by 1st day 10/01/19 Tax Law
of the month 2 months after
crossing threshold crossed. FAQs

Michigan $100K OR 200 Register and remit by start of 10/01/18 More Info
transactions calendar year after crossing
threshold - AGGRESSIVELY Tax Law
ENFORCING.

Minnesota $100K OR 200 Register and remit within 60 10/01/18 Tax Law
transactions days after crossing threshold. amended
10/01/19 FAQs

Mississippi $250K Unspecified how soon to 09/01/18 CLICK

register after crossing HERE
threshold. Could be as early as
next transaction.

Missouri N/A Proposed effective date of N/A N/A

01/01/23 for $100K
economic threshold.

Montana N/A N/A N/A N/A

Nebraska $100K OR 200 Register and remit by 1st day of 04/01/19 Tax Law
transactions 2nd month after crossing
threshold. FAQs

Nevada $100K OR 200 Register and remit 1st day of 10/01/18 Tax Law
transactions the month starting at least 30 FAQs
days after crossing threshold.
Regulations

New Hampshire N/A N/A N/A N/A

New Jersey $100K OR 200 Register and remit within 30 11/01/18 More Info
transactions days after crossing threshold. Tax Law
FAQs

10 Steps to Ensure Sales Tax Doesn’t Burn Down Your Ecommerce Business LedgerGurus.com 21
 Appendix Economic Nexus: State Thresholds and Laws

State Threshold Registration Information Date References

New Mexico $100K Remote sellers register by Jan 07/01/19 Tax Law
1 of the year following the year
of crossing threshold. Tax Law
Changes

New York $500K and 100 Register within 30 days after 06/18/18 More Info
transactions crossing threshold and begin to
collect 20 days after -
AGGRESSIVELY ENFORCING.

North Carolina $100K OR 200 Register within 60 days of 11/01/18 More Info
transactions crossing threshold.
Tax Law

North Dakota $100K Register and remit the earlier of 10/01/18 Tax Law
the following calendar year or 60 Another Tax
days after crossing the threshold Law
- AGGRESSIVELY ENFORCING. FAQs

Ohio $100K Register and collect the day 08/01/19 More Info
after crossing threshold.
Tax Law

Oklahoma $100K Register and collect by first 11/01/19 Tax Law

calendar month after crossing Another Tax
threshold. Law
FAQs

Oregon N/A N/A N/A N/A

Pennsylvania $100K If previous year exceeds 07/01/19 More Info

threshold, seller must collect
and remit by April 1 of the next Bulletin
year.

Rhode Island $100K OR 200 Register and remit on Jan 1 of 07/01/19 More Info
transactions the year after crossing
threshold. Tax Law

South Carolina $100K Register and remit 1st day of 11/01/18 Tax Law
2nd month after crossing FAQs
threshold.
Resources

10 Steps to Ensure Sales Tax Doesn’t Burn Down Your Ecommerce Business LedgerGurus.com 22
 Appendix Economic Nexus: State Thresholds and Laws

State Threshold Registration Information Date References

South Dakota $100K OR 200 Register and remit immediately 11/01/18 Resources
transactions after crossing threshold -
AGGRESSIVELY ENFORCING. Bulletin

Tennessee $100K Register and collect by 1st day 07/01/19 Tax Law
of the 3rd calendar month after Guidance
crossing threshold.
Rules

Texas $500k Register by 1st day of 4th month 10/01/19 Tax Law
after crossing threshold -
AGGRESSIVELY ENFORCING. Resources

Utah $100K OR 200 Unspecified how soon to 01/01/19 Tax law

transactions register after crossing
threshold. Could be as early as
More Info
next transaction.

Vermont $100K OR 200 Register and collect within 30 07/01/18 Tax Law
transactions days after crossing threshold.
FAQs

Virginia $100K OR 200 Register and collect within 30 07/01/19 More Info
transactions days after crossing threshold. Tax Law
Guidelines

Washington $100K Register and remit 1st day of 10/01/18 More Info
month starting 30 days after
crossing threshold -
AGGRESSIVELY ENFORCING.

Washington $100K OR 200 Register and collect immediately 01/01/19 More Info
D.C transactions after crossing threshold. Tax Law
FAQs

West Virginia $100K OR 200 Register and collect the day 01/01/19 More Info
transactions after crossing threshold. Tax Law

Wisconsin $100K Register and collect immediately 10/01/18 More Info

upon crossing threshold - Tax Law
AGGRESSIVELY ENFORCING. FAQs

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10 Steps to Ensure Sales Tax Doesn’t Burn Down Your Ecommerce Business LedgerGurus.com 23
 DAVID Y. IGE
GOVERNOR LINDA CHU TAKAYAMA
DIRECTOR
DOUGLAS S. CHIN
LIEUTENANT GOVERNOR DAMIEN A. ELEFANTE
DEPUTY DIRECTOR

STATE OF HAWAII
DEPARTMENT OF TAXATION
830 PUNCHBOWL STREET, ROOM 221
HONOLULU, HAWAII 96813
http://tax.hawaii.gov/
Phone: (808) 587-1530 / Fax: (808) 587-1584
Email: Tax.Rules.Office@hawaii.gov

July 10, 2018

DEPARTMENT OF TAXATION ANNOUNCEMENT NO. 2018-10

Re: Implementation of Act 41, Session Laws of Hawaii 2018, Relating to When a Taxpayer is
Engaging in Business in the State for Purposes of Hawaii’s General Excise Tax

This Announcement amends and supersedes Announcement No. 2018-10, previously

issued on June 27, 2018. Taxpayers are advised that the Department will not retroactively
administer Act 41, which is effective July 1, 2018.

Background

The general excise tax (GET) is a privilege tax imposed on all business and other
activities “in the State.” Haw. Rev. Stat § 237-13. Although it is clear that a business with a
physical presence in Hawaii satisfies the statutory “in the State” requirement and is therefore
subject to GET, the law was previously unclear as to the circumstances under which a business
that lacks a physical presence in Hawaii would satisfy the “in the State” requirement. See
Travelocity.com, L.P. v. Director of Taxation, 135 Hawaii 88, 103 (2015) (rejecting argument
that taxpayers must have physical presence in the State to satisfy the statutory “in the State”
requirement).

Act 41, Session Laws of Hawaii 2018 (Act 41) clarifies the “in the State” requirement by
creating a bright-line rule for businesses that lack a physical presence in Hawaii. Specifically,
Act 41 provides that a person is engaging in business in the State, regardless of whether the
person is physically present in the State, if in the current or preceding calendar year:

(1) The person has gross income of $100,000 or more from the sale of tangible
personal property delivered in the State, services used or consumed in the State,
or intangible property used in the State; or

(2) The person has entered into 200 or more separate transactions involving tangible
personal property delivered in the State, services used or consumed in the State,
or intangible property used in the State.
Department of Taxation Announcement No. 2018-10
July 10, 2018
Page 2 of 7

Somewhat overlapping with the statutory “in the State” requirement is the requirement
imposed by the U.S. Commerce Clause that a taxpayer’s activity must have a substantial nexus
with the taxing jurisdiction. See Baker & Taylor, Inc. v. Kawafuchi, 103 Hawaii 359, 365-71
(2004) (analyzing whether taxpayer was engaged in business “in the State” and whether
taxpayer’s activity had a substantial nexus with the State); see also Complete Auto Transit v.
Brady, 430 U.S. 274, 279 (1977) (articulating substantial nexus requirement).

In South Dakota v. Wayfair, Inc., No. 17-494, 2018 WL 3058015, at *17 (U.S. Jun. 21,
2018), the U.S. Supreme Court held that South Dakota’s law, Senate Bill 106, which has a
similar $100,000 or 200-transaction threshold, satisfies the substantial nexus requirement
imposed by the U.S. Commerce Clause, as “[t]his quantity of business could not have occurred
unless the seller availed itself of the substantial privilege of carrying on business in [the state].”

In sum, the imposition of the GET on a taxpayer who lacks physical presence in Hawaii,
but who has gross income of $100,000 or more or who has entered into 200 or more transactions
attributable to Hawaii, comports with the statutory “in the State” requirement as well as the U.S.
Commerce Clause’s substantial nexus requirement.

A taxpayer will therefore be required to maintain a GET license, file GET returns, and
remit GET to the State if any of the following applies:

(1) Taxpayer has a physical presence1 in Hawaii;

(2) In the current or preceding calendar year, taxpayer has gross income or gross
proceeds of $100,000 or more from any of the following, or combination of the
following, activities:
a. Tangible property delivered in Hawaii;
b. Services used or consumed in Hawaii2; or
c. Intangible property used in Hawaii; or

(3) In the current or preceding calendar year, taxpayer has entered into 200 or more
separate transactions involving any of the following, or combination of the
following, activities:
a. Tangible property delivered in Hawaii;
b. Services used or consumed in Hawaii; or
c. Intangible property used in Hawaii.

1
Physical presence includes, but is not limited to, having an office, employees or representatives,
inventory, or other property in Hawaii, or providing services in Hawaii, such as installation,
training, maintenance, or repair services.
2
See sections 18-237-29.53-01 through 18-237-29.53-13, Hawaii Administrative Rules, and Tax
Information Release No. 2018-06 for more information regarding the sourcing of income from
services.
Department of Taxation Announcement No. 2018-10
July 10, 2018
Page 3 of 7

Implementation of Act 41 in 2018

Retroactivity

Although the U.S. Supreme Court, in South Dakota v. Wayfair, Inc., held that Senate Bill
106 satisfied the substantial nexus requirement, the Court did not rule on whether Senate Bill 106
violated other principles of the U.S. Commerce Clause. Wayfair, 2018 WL 3058015, at *17.
The Court noted, however, that South Dakota’s law contains “several features that appear
designed to prevent discrimination against or undue burdens upon interstate commerce,”
including a prohibition on retroactive application of Senate Bill 106. Id.

To avoid any constitutional concerns, the Department will not retroactively administer
Act 41. Accordingly, taxpayers who lacked physical presence in Hawaii prior to July 1, 2018,
but who met the $100,000 or 200-transaction threshold in 2017 or 2018, will not be required to
remit GET for the period from January 1, 2018 to June 30, 2018.

Deadline to File First Return

Periodic returns are due on the 20th day following the close of the filing period. A
taxpayer’s filing period is monthly if more than $4,000 in GET will be paid for the year;
quarterly if more than $2,000, but $4,000 or less in GET will be paid for the year; or
semiannually if $2,000 or less in GET will be paid for the year. Annual returns are due on the
20th day of the fourth month following the close of the tax year.

If, prior to July 1, 2018, a taxpayer lacks physical presence in Hawaii and meets the
$100,000 or 200-transaction threshold for 2017 or 2018, the taxpayer will be subject to GET
beginning on July 1, 2018 and must file its first periodic return by the deadline for that period.
Fiscal year taxpayers will be subject to GET beginning on July 1, 2018 or the first day of the tax
year beginning after December 31, 2017, whichever is later.

If a taxpayer who lacks physical presence in Hawaii meets the $100,000 or 200-
transaction threshold between July 1, 2018 and December 31, 2018, the taxpayer will be subject
to GET beginning on July 1, 2018. Fiscal year taxpayers will be subject to GET beginning on
July 1, 2018 or the first day of the tax year beginning after December 31, 2017, whichever is
later. The taxpayer will be given a grace period of one period for the filing of the first periodic
return. Accordingly, the taxpayer must file its first periodic return by the deadline for the
periodic return following the period in which the taxpayer met the $100,000 or 200-transaction
threshold.

If the taxpayer meets the threshold during the last period of the tax year, the taxpayer will
not be required to file a periodic return for that period. Instead, the taxpayer’s first return will be
the annual return for that tax year.
Department of Taxation Announcement No. 2018-10
July 10, 2018
Page 4 of 7

The following chart provides the first filing deadlines for calendar year taxpayers who
will be filing on a monthly basis:

When Threshold Was First Met First Filing Deadline

1/1/17 – 12/31/17 8/20/18
1/1/18 – 6/30/18 8/20/18
7/1/18 – 7/31/18 9/20/18
8/1/18 – 8/31/18 10/22/18
9/1/18 – 9/30/18 11/20/18
10/1/18 – 10/31/18 12/20/18
11/1/18 – 11/30/18 1/21/19
12/1/18 – 12/31/18 4/22/19 (annual return)

Catchup Income

Because taxpayers who meet the $100,000 or 200-transaction threshold after July 1, 2018
are given a grace period for the filing of their first return, said taxpayers will need to report
“catchup income” (income recognized prior to and during the period in which the taxpayer meets
the threshold) and pay GET on said income. The Department will allow taxpayers to report and
pay GET on catchup income, without penalty and interest, as follows:

(1) The taxpayer may report and pay GET on all catchup income in full on the first
periodic return; or
(2) The taxpayer may report and pay GET on catchup income by spreading the
liability equally over the remaining periods in the current tax year.

If, however, the taxpayer meets the threshold during the last period of the tax year, the taxpayer
must report and pay GET on all catchup income in full on the annual return.

Implementation of Act 41 in Subsequent Years

In 2019 and later years, if a taxpayer lacks physical presence in Hawaii and did not meet
the $100,000 or 200-transaction threshold in the preceding calendar year, the taxpayer will be
given a grace period of one period for the filing of the first periodic return. Accordingly, the
taxpayer must file its first periodic return by the deadline for the periodic return following the
period in which the taxpayer met the $100,000 or 200-transaction threshold. Additionally, the
Department will allow taxpayers to report and pay GET on catchup income, without penalty and
interest, in the same manner described above.
Department of Taxation Announcement No. 2018-10
July 10, 2018
Page 5 of 7

FAQs

Engaging in Business in the State

1. I have a physical presence in Hawaii, but I have less than $100,000 in gross
income and have entered into less than 200 transactions in 2017 and 2018. Will I be subject
to GET for the tax year beginning in 2018?

Yes, because you have a physical presence in Hawaii, you are engaging in business in the
State and are subject to GET even if you do not meet the $100,000 or 200-transaction threshold.

2. I do not have a physical presence in Hawaii, but I have $100,000 in gross

income attributable to Hawaii in 2018. Will I be subject to GET for the tax year beginning
in 2018?

Yes, you are engaging in business in the State because you met the $100,000 threshold in
the current calendar year.

3. I do not have a physical presence in Hawaii. My gross income attributable to

Hawaii was $100,000 in 2017 and $50,000 in 2018. Will I be subject to GET for the tax
year beginning in 2018?

Yes, you are engaging in business in the State because you met the $100,000 threshold in
the preceding calendar year.

4. I do not have a physical presence in Hawaii, but in 2017, I entered into 100
transactions for tangible property delivered in Hawaii and 100 transactions for intangible
property used in Hawaii. Will I be subject to GET for the tax year beginning in 2018?

Yes, you are engaging in business in the State because you have entered into 200
transactions attributable to Hawaii in the preceding calendar year. The 200-transaction threshold
may be met by any combination of tangible property delivered in the State, services used or
consumed in the State, or intangible property used in the State.

5. I do not have a physical presence in Hawaii. If I entered into 200

transactions attributable to Hawaii in 2018, but have less than $100,000 in gross income,
will I be subject to GET for the tax year beginning in 2018?

Yes, you are engaging in business in the State because you have entered into 200
transactions attributable to Hawaii in the current calendar year. You will be subject to GET if
you meet the $100,000 or the 200-transaction threshold; you do not need to meet both.
Department of Taxation Announcement No. 2018-10
July 10, 2018
Page 6 of 7

Filing and Payment Deadlines

6. I do not have a physical presence in Hawaii, but, I have $100,000 in gross

income attributable to Hawaii between January 1, 2018 and June 30, 2018. Will I be
subject to GET for the $100,000?

You will be subject to GET for the tax year beginning in 2018, but will not be subject to
GET for any periods between January 1, 2018 and June 30, 2018.

7. I do not have a physical presence in Hawaii, but, I have $100,000 in gross

income attributable to Hawaii between January 1, 2018 and June 30, 2018. When is the
deadline to file my first GET return?

If you are a calendar year taxpayer and will be filing on a monthly basis, your first return
is due on August 20, 2018; if you are a calendar year taxpayer and will be filing on a quarterly
basis, your first return is due on October 22, 2018; if you are a calendar year taxpayer and will be
filing on a semiannual basis, your first return is due on January 21, 2019.

8. I do not have a physical presence in Hawaii, but I have $100,000 in gross

income attributable to Hawaii between January 1, 2018 and June 30, 2018. I have $20,000
in gross income for July 2018. How much income should I report on my next periodic
return?

Assuming you are a calendar year taxpayer who will be filing on a monthly basis, you
should report $20,000 in gross income on the return due on August 20, 2018.

9. I do not have a physical presence in Hawaii and do not have any gross
income or transactions attributable to Hawaii in 2017. I have $80,000 in gross income
attributable to Hawaii between January 1, 2018 and June 30, 2018; $10,000 in gross income
for July 2018; $14,000 in gross income for August 2018; and $16,000 in gross income for
September 2018. When is the deadline to file my first GET return? How much income
should I report?

Assuming you are a calendar year taxpayer who will be filing on a monthly basis, you are
required to file your first return by October 22, 2018. Because you met the threshold in August
2018, you are given a grace period of one month, to October 22, 2018, to file your first periodic
return. On the October 22, 2018 return, you may either: (1) report $40,000 in gross income
(catchup income of $24,000 plus $16,000 in income for September); or (2) report $22,000 in
gross income (catchup income of $24,000 divided over four monthly periods, or $6,000, plus
$16,000 in income for September).
Department of Taxation Announcement No. 2018-10
July 10, 2018
Page 7 of 7

10. I do not have a physical presence in Hawaii and do not have any gross
income or transactions attributable to Hawaii in 2017. I met the $100,000 threshold in
December 2018. My gross income between July 1, 2018 and December 31, 2018 is $50,000.
When is the deadline to file my first GET return? How much income should I report?

Assuming you are a calendar year taxpayer, you are required to file an annual return by
April 22, 2019 and report $50,000 in gross income on that return. You are not required to file a
periodic return for the 2018 tax year because you met the threshold during the last period of the
tax year. Additionally, you may not pay the catchup income in installments because there are no
remaining periods in the tax year.

11. I do not have a physical presence in Hawaii and do not have any gross
income or transactions attributable to Hawaii in 2017 or 2018. I have $90,000 in gross
income attributable to Hawaii in January 2019; $80,000 in gross income in February 2019;
and $50,000 in gross income in March 2019. When is the deadline to file my first GET
return? How much income should I report?

Assuming you are a calendar year taxpayer who will be filing on a monthly basis, you are
required to file your first return by April 22, 2019. Because you met the threshold in February
2019, you are given a grace period of one month, to April 22, 2019, to file your first periodic
return. On the April 22, 2019 return, you may either: (1) report $220,000 in gross income
(catchup income of $170,000 plus $50,000 in income for March); or (2) report $67,000 in gross
income (catchup income of $170,000 divided over 10 monthly periods, or $17,000, plus $50,000
in income for March).

For additional information regarding Act 41, contact the Rules Office at (808) 587-1530
or by email at Tax.Rules.Office@hawaii.gov. For general information regarding Hawaii’s GET,
and to obtain tax forms, instructions, and publications, visit the Department’s website at
tax.hawaii.gov.

LINDA CHU TAKAYAMA

Director of Taxation
HOUSE BILL 259 – Idaho State Legislature

STATE OF IDAHO
 
The official website of the WHO’S MY LEGISLATOR?

Idaho Legislature
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2019 Legislation

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HOUSE BILL 259
The status of each bill, resolution, proclamation, and memorial is updated when the offices of the
Secretary of the Senate and the Chief Clerk of the House publish the un-official daily journals and should
not be deemed official. The official bill actions are located in the final journal, which are maintained by
the offices of the Secretary of the Senate and the Chief Clerk of the House.  The daily journals are
published at the end of each legislative day.

Full Bill Information

Individual Links:

      Bill Text

         Amendment
      Engrossment 1 – This is known as the engrossed bill that incorporates adopted amendments. The
highest numbered engrossment is the final version that was considered for adoption.
     Statement of Purpose / Fiscal Note

H0259aaS  by REVENUE AND TAXATION COMMITTEE

SALES TAX – Amends and adds to existing law to define terms and to provide for the powers and
duties of certain retailers and marketplace facilitators with regard to the collection of the state
sales tax.

https://legislature.idaho.gov/sessioninfo/2019/legislation/H0259/[6/10/2021 12:15:25 PM]

HOUSE BILL 259 – Idaho State Legislature

  03/12 Introduced, read first time, referred to JRA for Printing  

  03/13 Reported Printed; Filed for Second Reading  
  03/14 Read second time; Filed for Third Reading  
  03/15 U.C. to hold place on third reading calendar until Monday, March 18, 2019  
  03/18 Read Third Time in Full – U.C. to be placed on General Orders; objection  
  Motion to send to Gen Ord, motion failed  
PASSED - 51-19-0
AYES – Addis, Amador, Anderson, Anderst, Andrus, Armstrong, Blanksma, Boyle,
Chaney, Clow, Collins, Crane, Dayley, DeMordaunt, Dixon, Ehardt, Erpelding,
Furniss, Gestrin, Gibbs, Goesling, Harris, Hartgen, Holtzclaw, Horman, Kauffman,
Kerby, Kingsley, Lickley, Marshall, Mendive, Monks, Moon, Moyle, Nichols, Palmer,
Raybould, Raymond, Ricks, Scott, Shepherd, Stevenson, Syme, Vander Woude,
  Wisniewski, Wood, Young, Youngblood, Zito, Zollinger, Mr. Speaker  
NAYS – Abernathy, Barbieri, Berch, Chew, Christensen, Davis, Ellis, Gannon,
Giddings, Green(18), Green(2), Mason, McCrostie, Rubel, Smith, Toone, Troy,
Wagoner, Wintrow
Absent – None
Floor Sponsor - Moyle
Title apvd - to Senate
  03/19 Received from the House passed; filed for first reading  
  Introduced, read first time; referred to: Local Government & Taxation  
  03/22 Reported out of committee; to 14th Order for amendment  
  03/26 Placed in the Committee of the Whole  
  Amendments ordered printed  
  Reported out as amended; filed for first reading  
  Amendments reported printed  
  Read first time as amended in the Senate; Filed for Second Reading  
  03/27 Read second time as amended in the Senate, filed for Third Reading  
  03/28 Retained on calendar  
Read third time as amended in the Senate – PASSED - 24-11-0
AYES – Anthon, Bair, Bayer, Burtenshaw, Cheatham, Den Hartog, Grow, Guthrie,
Harris, Heider, Hill, Lakey, Lee, Lent, Lodge, Martin, Mosman(Johnson), Nye, Patrick,
Rice, Souza, Thayn, Vick, Winder
  NAYS – Agenbroad, Brackett, Burgoyne, Crabtree, Jordan, McCoy(Buckner-Webb),  
Mortimer, Nelson, Stennett, Ward-Engelking, Woodward
Absent and excused – None
Floor Sponsor - Rice
Title apvd - to House
  Returned from the Senate Amended  
  Referred to Revenue & Taxation for concurrence recommendation  
  04/01 Reported out of Committee and Recommend Concurrence  
  House Concurred in Senate Amendments  
  Bills as Amended Referred to JRA for Engrossing  
  04/02 Reported Engrossed; Filed for First Reading of Engrossed Bills  

https://legislature.idaho.gov/sessioninfo/2019/legislation/H0259/[6/10/2021 12:15:25 PM]

HOUSE BILL 259 – Idaho State Legislature

  Read first time as amended in Senate; Filed for Second Reading  
  04/03 Read second time as amended in Senate; Filed for Third Reading  
Rules Suspended: Ayes 65 Nays 0 Abs/Excd 5, read in full as required –
PASSED - 57-10-3
AYES – Addis, Amador, Anderst, Andrus, Armstrong, Barbieri, Blanksma, Boyle,
Clow, Collins, Crane, Dayley, DeMordaunt, Dixon, Ehardt, Ellis, Erpelding, Furniss,
Gestrin, Gibbs, Giddings, Goesling, Green(18), Green(2), Harris, Hartgen, Holtzclaw,
Horman, Kauffman, Kerby, Kingsley, Lickley, Marshall, Mason, Mendive, Monks,
Moon, Moyle, Nichols, Palmer, Raybould, Raymond, Ricks, Scott, Smith, Stevenson,
   
Syme, Troy, Vander Woude, Wagoner, Wisniewski, Wood, Young, Youngblood, Zito,
Zollinger, Mr. Speaker
NAYS – Abernathy, Anderson, Berch, Chew(Toevs), Davis(Page), Gannon,
McCrostie, Rubel, Toone, Wintrow
Absent – Chaney, Christensen, Shepherd
Floor Sponsor - Moyle
Title apvd - to enrol
  04/04 Reported Enrolled; Signed by Speaker; Transmitted to Senate  
  04/05 Received from the House enrolled/signed by Speaker  
  Signed by President; returned to House  
  04/08 Returned Signed by the President; Ordered Transmitted to Governor  
  Delivered to Governor at 10:15 a.m. on April 8, 2019  
04/09 Reported Signed by Governor on April 9, 2019
      Session Law Chapter 320  
    Effective: 06/01/2019

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 For updated information, please refer to the Resource Page for the “Leveling the Playing Field for Illinois Retail Act”.

Illinois Department of Revenue FY 2019-05

informational
August 2018

Bulletin
Constance Beard, Director
Use Tax Guidance for
Remote Sellers
To: Remote (out-of-state) sellers making
This bulletin is written to inform you
of recent changes; it does not replace sales to Illinois purchasers
statutes, rules and regulations, or
court decisions. Remote sellers are retailers that make sales from locations outside Illinois. If those
retailers have sufficient contact, or “nexus,” with Illinois, they are required to register
For information or forms to collect and remit tax on their sales to Illinois purchasers. Until October 1, 2018,
Visit our website at: registration is required only of remote sellers that have a physical presence in this
tax.illinois.gov state.
However, Illinois Public Act (P.A.) 100-587 and the subsequent U.S. Supreme Court’s
Register and file your return online at: decision in South Dakota v. Wayfair, Inc. created a new type of nexus, in which
mytax.illinois.gov
certain retailers with no physical presence in Illinois that are making sales of tangible
personal property to Illinois purchasers must collect and remit Illinois Use Tax.
Call us at:
1 800 732-8866 or Remote sellers with no physical presence in Illinois that meet either of the following
217 782-3336 thresholds must register with the Department to begin collecting and remitting Illinois
Use Tax for sales made to Illinois purchasers on or after October 1, 2018:
Call our TDD • the retailer’s cumulative gross receipts from sales of tangible personal property to
(telecommunications device purchasers in Illinois are $100,000 or more; or
for the deaf) at:
• the retailer enters into 200 or more separate transactions for the sale of tangible
1 800 544-5304
personal property to purchasers in Illinois.

How do I determine whether I need to register with Illinois

* Physical presence includes, but is not
limited to, the following:
• having an office or other facility in
Illinois,
• having employees in Illinois, or
• having other representatives
operating in Illinois.
See 86 Ill Adm. Code 150.201.
Printed by the authority of the State of Illinois
(N-08/18) 9,800 copies - PO # 2190065
as a remote seller?
Do I have physical presence* nexus with Illinois?
• If yes, you should already be registered. This bulletin does not apply to you.
• If no, go to the next question.
Do I sell tangible personal property to Illinois purchasers?
• If yes, continue to the next question.
• If no, you are not required to register to collect and remit Use Tax.
Do I make exclusively nontaxable sales to Illinois purchasers (100% sales for
resale or 100% exempt sales)?
• If yes, you do not need to register with the Department.
• If no, go to the next question.
Do I have sales to Illinois purchasers that meet either of the thresholds?
• If yes, even if you don’t have physical presence nexus with Illinois, you must
register to collect and remit Illinois Use Tax.
• If no, you are not required to register, but you may voluntarily register to collect
and remit Illinois Use Tax as a courtesy to your Illinois customers.
Informational Bulletin - Use Tax Guidance for Remote Sellers
How do I determine whether I meet a threshold
requiring me to begin collecting Use Tax on
October 1, 2018?
A remote seller must examine its selling activities in Illinois for the
period of September 1, 2017, through August 31, 2018. If, during
this period, the remote seller meets either of the thresholds listed
on page 1 of this bulletin, the remote seller must register with the
Department to collect Illinois Use Tax beginning October 1, 2018.
What sales are excluded from the threshold
determination?
As part of the threshold determination, remote sellers must
exclude the following types of sales:
• sales for resale (see 86 Ill. Adm. Code 130.201),
• sales of tangible personal property that is required to be
registered with an agency of this State, including motor
vehicles, watercraft, aircraft, and trailers, when these sales
are made from locations outside Illinois to Illinois purchasers,
and
• occasional sales (see 86 Ill. Adm. Code 130.110).
All sales other than these, even if they are exempt from tax, must
be included in calculating the thresholds.
What if I determine that I do not meet either
of the thresholds requiring me to begin
collecting Use Tax on October 1, 2018?
The remote seller must determine, on a quarterly basis, whether
it is obligated to begin collecting Illinois Use Tax. In this case, for
each quarter ending on the last day of March, June, September,
and December, the remote seller must examine its sales to Illinois
purchasers for the immediately preceding 12-month period. If the
remote seller met either threshold for the immediately preceding
12-month period, the remote seller is required to register to
collect and remit Use Tax for a one-year period.
EXAMPLE: Remote Seller A begins making sales to Illinois
purchasers on December 1, 2018. On December 31, 2018
(its first quarterly period after September 30, 2018), the
remote seller determines that it has not met either threshold
for the previous 12 months. At the end of March 2019 (its
next quarterly period), however, the remote seller determines
that it made $200,000 in sales to Illinois purchasers for
the preceding 12-month period. As a result, the remote
seller is required to register to collect and remit Use Tax on
sales to Illinois purchasers for a one-year period beginning
April 1, 2019, through March 31, 2020. On March 31, 2020,
the remote seller must examine its sales to Illinois
purchasers for the one-year lookback period beginning
April 1, 2019, through March 31, 2020, to determine whether
the remote seller must continue to collect Use Tax.
If you determine that you are no longer required to collect and
remit Illinois Use Tax you must contact the Department to update
your registration. If your registration is not updated with the
Department you will be considered to be actively registered with
the Department and required to collect and remit Illinois Use Tax.
For updated information, please refer to the Resource Page for Marketplace Facilitators, Marketplace Sellers, and Remote Sellers.
2
Visit our website at tax.illinois.gov for more information and updates.
FY 2019-05
I already voluntarily collect and remit Use Tax,
should I continue?
Remote sellers that were voluntarily registered in Illinois prior to
P.A. 100-587 will continue to collect and remit Use Tax. However,
if you meet either threshold, your status with the Department will
change to that of a mandatory Use Tax collector. You must contact
the Department to update your registration. This will not affect the
way you collect and remit Use Tax to the Department. Once you
become a mandatory Use Tax collector, you will be subject to all
provisions of the Use Tax Act, including late file/late pay penalties.
How do I register with the Department?
Register with the Department electronically using MyTax Illinois,
available at mytax.illinois.gov:
• To register a new business, click on the blue button that says
“Registration,” and then click “Register a New Business”
to complete Form REG-1, Illinois Business Registration
Application. After you receive an email that the application
has been processed, allow one business day before signing
up for MyTax Illinois. To create a MyTax Illinois account,
click on the “Sign up Now” button, and submit the requested
information.
• If you already have a MyTax Illinois account you can register
for new tax types by simply logging into your MyTax Illinois
account and clicking on “Register for New Tax Accounts” to
complete the registration.
Contact our Central Registration Division at 217 785-3707 for
information or assistance with registering your business.
Note: There is no charge to register with the Department.
What is the Use Tax rate?
The Use Tax rate is 6.25% for general merchandise and 1% for
qualifying food, drugs and medical appliances. Refer to the Illinois
Remote Seller Use Tax Matrix for details. The Department does
not collect any locally-imposed use taxes on general merchandise
or qualifying food, drugs or medical appliances.
When is tax due?
You must file Form ST-1, Sales and Use Tax and E911
Surcharge Return, along with any payment you owe, on or before
the 20th day of the month following the end of your reporting
period. New registrants will receive a letter informing them of their
filing status (i.e., monthly or quarterly).
How do I file and pay the tax due?
Once you are registered with the Department, you can use
MyTax Illinois to file your Form ST-1. MyTax Illinois also allows
for electronic payment of any tax due.
You can also file Form ST-1 using a third party software vendor
or through our Electronic Filing Program.
Where can I find more information?
See 86 Ill. Adm. Code 150.803, Nexus Without Physical
Presence and information on our website.
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About the Supreme Court's Decision

Pursuant to the U.S. Supreme Court’s 1992 decision in Quill Corp. v. North
Dakota, sellers without a physical presence in a state were not required to collect and remit sales tax to that particular
state.  On June 21, 2018, the Court issued its ruling in South Dakota v. Wayfair, Inc., overturning its prior decision in Quill,
such that physical presence is no longer required for sellers to be obligated to collect and remit sales taxes.

On June 21, Indiana Gov. Eric J. Holcomb ofered the following statement regarding the Wayfair decision:

“A lot about our world and economy has changed in the 26 years since our nation’s highest court last ruled on this
issue. With the incredible evolution of technologies and the growth of internet sales, this Supreme Court ruling will
help level the playing feld between our Hoosier-based companies that operate retail stores and out-of-state
companies that sell products and services online in our state. We’re taking a careful look at the ruling to better
understand its implications for Indiana.”

As the Indiana Department of Revenue (DOR) analyzes the contents of the Court’s decision, please see our Frequently
Asked Questions to better understand how current Indiana laws and fling requirements apply to you. DOR is committed
to being transparent in working with the business community to implement this historic decision.

Streamlined Sales Tax Guidance

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DOR: Remote Seller Information

More Information

Frequently Asked Questions

Announcement: Indiana
DOR Prepares to Move
Foward With Out-of-State
Sales Tax- July 2018
U.S. Supreme Court’s
decision in South Dakota v.
Wayfair
Learn more about Indiana
sales tax.
Additional information:
To register in multiple
states to collect sales tax
use the Streamlined
Sales Tax Registration
System.
To register to collect Indiana sales tax use Indiana’s INBiz.
To file and pay Indiana sales tax electronically using INTIME.

Date of publication: April 17, 2019

Frequently Asked Questions

NOTE: As we review the U.S. Supreme Court’s decision in South Dakota v. Wayfair, we will be providing frequent updates. Please
check back frequently for updated FAQs and guidance to help you understand how Indiana’s laws and fling requirements apply
to you. DOR began enforcing Indiana’s economic nexus law on October 1, 2018. That said, any merchant may voluntarily
register and remit sales tax to Indiana.

Indiana law (IC 6-2.5-2-1(c)) requires a seller without a physical location in Indiana to obtain a registered retail merchant’s
certifcate, collect and remit applicable sales tax if the seller meets either or both of the following conditions in the
previous calendar year or the current calendar year:

1. Gross revenue from sales into Indiana exceeding $100,000, including sales that are not subject to sales tax or are
considered tax exempt; or
2. 200 or more separate transactions into Indiana.

Sales into Indiana or sales transactions include any combination of sales of tangible personal property delivered into
Indiana, products transferred electronically into Indiana and services delivered in Indiana.

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DOR: Remote Seller Information

What is a remote seller? +

What has changed for remote sellers? +

What is the law in Indiana? +

What is the current status of the law in Indiana? +

Is this applied retroactively? “I have been selling products into Indiana for a while now. Do I have to remit tax for +
sales prior to October 1, 2018?”

How do I register? +

Should I register to collect sales tax or out-of-state use tax? +

What is the Streamlined Sales Tax Registration System (SSTRS)? +

Can I register today? +

Many news articles make reference to states providing free software to vendors. Is this correct? +

What is a Certified Service Provider (CSP)? +

If I have already collected sales tax, what do I need to do? +

Which of my sales are taxable in Indiana? +

What are the documentation requirements regarding exempt sales made by a remote seller? +

What if I meet Indiana’s threshold, but I don’t make any taxable sales in Indiana? +

I don’t have a physical presence in Indiana, do I have to register? +

I make sales through my own website; do I need to collect tax? +

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DOR: Remote Seller Information

What is Indiana’s current sales tax rate? +

How do I file and remit the sales tax to Indiana? +

What if I am an Indiana business that makes sales into other states? +

Do the remote seller requirements apply to non-U.S. sellers? +

Will registering for Indiana sales tax obligate a remote seller to file and pay any other taxes or result in the seller +
receiving a nexus questionnaire to determine whether the seller has any other Indiana tax obligations?

What is the effective date of the law in Indiana following the Supreme Court's ruling? +

How does HEA 1129 (2017) impact remote sellers that utilize an online marketplace facilitator? +

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