The Supreme Court’s ruling in South Dakota v. Wayfair, Inc. changed the standard for when states need to collect sales tax from entities doing business in the state. Before the decision, states taxed only companies with a physical presence in the state, but they now tax all those with an economic presence.
COVID-19 caused many brick-and-mortar entities to strengthen or create their online presence, forcing them to address sales tax complexities they did not have to contend with when sales were local.
COVID-19 may have created tax complications for companies with employees working from home in another state. To prevent tax surprises for you and your employees, understanding how to classify wages will avoid penalties and amending tax filings.
The Supreme Court’s decision in South Dakota v. Wayfair applies to you if your business operates in two or more taxing jurisdictions. Learn the basics of collecting and reporting sales tax.