INFOGRAPHIC: South Dakota v. Wayfair: What It Means for PROs

Tax compliance isn’t an exciting or interesting topic to most people, but it is an important one. So when cases like South Dakota v. Wayfair impact the portable sanitation industry, we feel it’s our duty to help industry professionals understand what it means for them.

That’s why we wrote an in-depth article about economic nexus changes the court case brought about and highlighted what is still happening today as a result. We suggest you read it to gain a full understanding of the history of the case and its outcomes.

However, if you just want to learn the main takeaways, we have an infographic that answers the most common questions, as they relate to people in the industry. View the infographic below to find out how South Dakota v. Wayfair could impact your portable restroom rental business.

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South Dakota v. Wayfair: What It Means for PROs

What is South Dakota v. Wayfair?

A Supreme Court case that was decided in 2018. With a 5-4 majority in favor of South Dakota, the ruling held that states may charge tax on purchases made from out-of-state sellers even if the seller does not have a physical presence in the taxing state.

What changed as a result of the ruling?

Previously, any store, distributor or manufacturer that didn’t have a physical presence in a state couldn’t charge sales tax in that state. This helped national e-commerce companies like Wayfair and Amazon grow rapidly with their tax-free status serving as a differentiator from smaller local businesses. However, the ruling addressed how local sellers were competitively disadvantaged and made the national companies pay a share once they met economic nexus.

What is economic nexus?

A business meets economic nexus when its monetary activities reach the state’s threshold for transaction volume or sales revenue. Since the Wayfair decision, most states now require companies to collect sales tax once they exceed $100,000 in sales revenue or 200 transactions with state customers.

How does South Dakota v. Wayfair impact PROs today?

More than 6 years after the decision, the effects of the case are still being felt. As with all business taxes, sellers must remit tax liabilities and fees to comply with state rules or face interest charges and penalties. In the portable sanitation industry, companies like PolyJohn needed to review their sales and tax practices to ensure they aligned with new state rules and evolving tax policies. Many negotiated with states to receive a grace period while they assessed their technologies and evaluated sales to determine which states to register with.

As a result, PROs in some states may have recently received a notice that they now owe sales tax on past purchases. If you haven’t, it may be on the way soon as more states seek back taxes.