Bill Nelson Provides Insight on North Carolina’s Decision to Enforce Remote Sellers to Collect Sales Tax with Bloomberg Tax

In the article “Remote Sellers to Collect North Carolina Sales Tax Starting Nov. 1,” Bloomberg Tax’s Andrew M. Ballard discusses the decision by the North Carolina Department of Revenue (NCDOR) to enforce an existing state law, which requires remote sellers to collect and remit taxes. The NCDOR’s decision is a response to the U.S. Supreme Court’s June 21^st ruling in South Dakota v Wayfair, which overruled previous decisions prohibiting states from requiring remote sellers without a physical presence in the state to collect sales tax. Beginning November 1st, the NCDOR will require out-of-state sellers having gross sales greater than $100,000 or 200 more transactions that are sourced to the state in a year to collect sales and use tax. 

Smith Anderson Partner Bill Nelson commented that the NCDOR chose not to wait for the General Assembly to revise existing state law in light of the Wayfair decision. “Rather than wait for the Legislature to respond to Wayfair, the department has chosen to enforce North Carolina’s existing remote seller statute, but only within what it believes to be the contours of the Wayfair decision. The Supreme Court’s decision in Wayfair does not establish clear rules applicable to all taxpayers, and whether the directive constitutes a correct interpretation of that decision is an open question,” Bill said. 

Bill notes that North Carolina’s law has existed for several years, and requires sales and use tax collection by any remote seller whose activities create nexus in the state by “exploiting the market” using direct mail, television, or other media. 

Read the full Bloomberg Tax article here.

Reproduced with permission. Published Aug. 9, 2018. Copyright 2018 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com.