KPMG LLP, the audit, tax and advisory firm, offered the following perspective on the April 17, 2018 arguments before the U.S. Supreme Court in South Dakota v. Wayfair, which addresses state taxation of online retail sales:
“Online commerce has reshaped the retail landscape, so there’s a lot at stake for both retailers and the states with South Dakota v. Wayfair,” said Harley Duncan, leader of the state and local tax group of the Washington National Tax practice of KPMG LLP.
“Retailers and states need to move fairly quickly so they’re prepared for any of several possible outcomes from the Supreme Court’s eventual ruling in Wayfair. Remote sellers should take steps now – because they may soon need to start collecting taxes in states where they previously didn’t have a physical presence,” Duncan said.
“Online retailers might quickly need to have the right processes and technologies in place to gather the information they’ll need to meet their potentially expanded reporting and compliance obligations. Now’s the time to begin to assure that they will,” Duncan said.
“The tax-related issue may not be completely resolved even if the court overturns Quill,” Duncan said. “Retailers and the states also need to keep an eye on any Congressional efforts to move forward legislation regarding online commerce.”
“If the court overturns Quill, there could be a complete lack of uniformity among the states on what constitutes nexus, which will leave retailers with no clear guidance on their sales tax collection responsibilities,” Duncan said. “Congress might decide to step in and consider a national standard for economic nexus to help address that situation.”
Prior to joining KPMG in 2008, Harley Duncan spent 20 years as executive director of the Federation of Tax Administrators, the association representing the principal state revenue collection agencies in each of the 50 states, D.C., and New York City. Earlier, he served as secretary of the Kansas Department of Revenue. He is based in Washington, D.C.
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