Podcast: Tips and Insights on Personal Liability for Sales Tax in the Manufacturing, Wholesale, and Retail Industries

Key Points: 

• Forty-four states and the District of Columbia have passed or upheld existing remote-seller Nexus legislation since 2018’s landmark South Dakota v. Wayfair decision. 
• The “Responsible Persons” can be made up of owners, officers and partners, but even employees responsible for reporting taxes also can be listed in state action. 
• Many businesses are overpaying taxes because they’re not questioning what tax sellers are charging.

Gone are the days when remote sellers can afford to procrastinate their obligations to register. It’s time to begin filing sales tax returns under the economic nexus laws requirements. 

2018’s South Dakota v. Wayfair decision established a state standard that many manufacturing companies and merchants have to keep up with; leading to a patchwork of state laws, some of which use the same parameters as South Dakota ($100,000 or 200 transactions) and others which have established their own. Since 2018, 44 states and the District of Columbia have passed or upheld existing remote-seller nexus legislation with Missouri and Florida likely next in line.

“The grace periods have passed. Most states did not come out right away and say, ‘OK, Wayfair passed in June of ’18, we’re going to go ahead and turn on the tax,’ Most of them pushed it out to 2019, some to 2020, but, as of today, the clock is ticking if you’re in a situation where you need to be reporting,” said Steven Scarborough, Senior Manager of State and Local Tax Services at Weaver.

That also can lead to confusion among vendors, and some businesses are paying too much tax because they’re not questioning the numbers provided by vendors or sellers they work with.

“You might have a significant refund opportunity if you haven’t already evaluated this,” said Shane Stewart, Weaver’s Partner-in-Charge of State and Local Tax Services. “What we’re seeing in our sales tax recovery practice, are a lot of refund claims we’re filing for our clients. These are growing in size and frequency, so there’s a lot of benefits to recovering the taxes. What you want to do is not have to go recover the taxes you overpaid. You want to pay the right amount if you can pull that up front.”

We welcome you to contact Steven Scarborough and Shane Stewart to talk more about their insights.

Subscribe and listen to future episodes of Weaver: Beyond the Numbers on Apple Podcasts or Spotify.

© 2021