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Vermont (Statute: Section 9701(9)(F)) – Effective: Later
of July 1, 2016 or a court decision/federal legislation
to overturn Quill vs. North Dakota; economic benefit
threshold: $100,000 or 200 sales transactions in the
previous 12 months.
Washington (Statute: Section 82.12.040(1)) – Effective:
January 1, 2016; economic benefit threshold: $500,000
in the past 12 months; subparagraph (5) provides an
exemption, but the exemption will expire if there is
federal legislation or a final court decision imposing sales
and use tax collection duties on remote sellers.
What You Need To Know
Presumably, these states have enacted economic
nexus provisions for two reasons: (1) to increase
revenue in their states and (2) more importantly, to try
to encourage the Supreme Court of the United States
to overturn prior case law that established the physical
presence requirement for nexus. As a result, out-of-
state businesses should carefully evaluate whether their
business activities and sales into the applicable state
have triggered economic nexus.
States
with
Economic
Nexus
Provisions
16
The states that have economic nexus provisions can be
categorized into three categories:
1. States that are enforcing their nexus provisions:
Alabama (starting July 1, 2016), Massachusetts
(starting July 1, 2017) and Tennessee (starting
July 1, 2017)
2. A state that will presumably enforce its provision,
assuming a taxpayer does not trigger the temporary
injunction provision: Wyoming (starting July 1, 2017)
3. States that are not currently enforcing the nexus
provisions: South Dakota, Vermont and Washington
Out-of-state sellers should also keep in mind that these
sales tax nexus provisions could impact other business
tax requirements. For example, in Tennessee, out-of-
state sellers may also be required to file a business tax
return.