Venable clients that engage in selling goods and/or services over the internet should evaluate whether the recent Supreme Court decision in South Dakota v. Wayfair will now require them to begin collecting sales and use taxes in states where they have not previously done so. In the Wayfair Case the Court held that a state can require a remote vendor to collect its sales/use tax based merely on “economic nexus” with the state. The prior law standard requiring a remote vendor to have physical presence in a state has been overturned. Under the South Dakota law at issue in Wayfair, an internet retailer is required to collect South Dakota sales tax if it has more than $100,000 of sales into the state or more than 200 sales transactions in the state over the course of a year.

Our chart below lists the states that currently have authorized an economic nexus standard similar to that approved in Wayfair and lists the threshold requirements for each state. This list can be expected to grow as states without economic nexus laws for sales tax purposes rush to alter their existing standards to take advantage of Wayfair’s liberalization of the sales tax nexus rules.

See our alert, “States Win and E-Retailers Lose as U.S. Supreme Court Alters Sales Tax Collection Standard,” providing more on Wayfair.

Vendors should move cautiously in evaluating compliance with the expanded collection obligations as a number of these statutes are likely to be subject to litigation, if such statute does not embody the three principles set in the Wayfair case to guide other courts in evaluating whether sales tax statutes of other states meet the Commerce Clause’s requirements:

First, the state law provides a safe harbor to protect those retailers that transact only limited business in the state from having to comply with the law by means of both the dollar amount and volume of transaction thresholds.

Second, the state law ensures that no obligation to remit the sales tax may be applied retroactively.

Third, the state has adopted the Streamlined Sales and Use Tax Agreement.

As noted in the chart below, not all states with an economic nexus standard meet all three of these criteria noted in the Wayfair decision. Accordingly, many years of further proceedings can be expected across the forty-five states that impose sales tax, as unique situations in the states’ economic nexus laws are tested against the standards of the Wayfair case.

The Aftermath of South Dakota v. Wayfair, Inc.: States with Economic Nexus Laws for Sales Tax Purposes

As of July 2018 the following states have implemented economic nexus provisions requiring out-of-state sellers to collect tax from in-state customers:


$ Threshold Amount

or / and

# of Transactions

Full Member of SSUTA

Alabama > $250,000 and No
Connecticut ≥ $250,000 and ≥ 200 No
Georgia > $250,000 or ≥ 200 Yes
Hawaii ≥ $100,000 or ≥ 200 No
Illinois ≥ $100,000 or ≥ 200 No
(enforcement stayed)
> $100,000 or ≥ 200 Yes
Iowa ≥ $100,000 or ≥ 200 Yes
Kentucky > $100,000 or ≥ 200 Yes
Louisiana > $100,000 or ≥ 200 No
Maine > $100,000 or ≥ 200 No
Massachusetts > $500,000 and ≥ 100 No
Minnesota ≥ $10,000 Yes
Mississippi > $250,000 No
North Dakota > $100,000 or ≥ 200 Yes
(enforcement stayed)
> $500,000 Yes
Oklahoma ≥ $10,000 Yes
Pennsylvania ≥ $10,000 No
Rhode Island ≥ $100,000 or ≥ 200 Yes
South Dakota
(enforcement stayed)
> $100,000 or ≥ 200 Yes
(enforcement stayed)
> $500,000 No, but Associate Member in “substantial compliance,” according to the Streamlined Sales Tax Governing Board.
Vermont ≥ $100,000 or ≥ 200 Yes
Washington ≥ $10,000 Yes
(enforcement stayed)
> $100,000 or ≥ 200 Yes