In June the U.S. Supreme Court ruled state and local governments can require online retailers collect sales tax even if they don’t have a physical presence in the tax jurisdiction. And 10 states' new requirements go into effect on Oct. 1.

Sales tax collection statutes and regulations that require online retailers to collect sales tax on online orders from residents of 10 states go into effect on Monday, Oct. 1.

The new standards, the details of which vary by state, apply to online retailers that do not have a physical presence in the taxing jurisdiction. The moves stem from the states moving quickly in the wake of the U.S. Supreme Court in June ruling in the South Dakota v. Wayfair Inc. case that, for the first time, states and local governments could require online retailers to collect sales tax even if they don’t have a physical presence, or nexus, in the state or local tax jurisdiction.

As a result, states are moving quickly to tap online sales as a new revenue stream. The states are in charge of the issue and are now reclaiming their authority over sales tax collection, says Jason Brewer, executive vice president, communications and state affairs at the Retail Industry Leaders Association. “States, in their own way, are implementing either via regulation or statute what they need to promote or compel sellers to comply.”

32 states currently have statutes or regulations in place to require sales tax collection by remote sellers and as more states’ standards take effect, online retailers have little choice but to find ways to navigate the hodgepodge of laws.

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Read about how e-retailers are managing to do so in Internet Retailer’s October issue cover story, “The Supreme Court overturned Quill. Now what?” Find additional resources and research available here.

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