Insights Magazine Volume IX | Page 18

(continued from page 15) 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.