Nexus Tax Law in South Dakota Upheld by U.S. Supreme Court
Jun 28, 2018
Recent U.S. Supreme Court nexus tax law decision has no immediate impact on CJ or our clients.
On June 21, 2018, the U.S. Supreme Court upheld a South Dakota sales tax law that requires a seller to collect and remit sales tax on online purchases even if a seller has no physical presence in the state where the purchase took place. Prior to this decision, it was unclear as to whether states could constitutionally require online sellers to collect and remit sales taxes in a state where it has no physical presence. Because of this decision, the states with existing affiliate nexus tax laws may broaden their laws to require all online sellers to collect and remit sales tax in those states, regardless of any relationship with in-state Publishers or other physical presence.
The Court’s decision does not create a new federal tax or change requirements under existing state tax laws, and therefore all current state tax laws remain the same. This decision does not have any immediate impact on CJ, our Advertisers, or our Publishers.
In the long run, tax laws like South Dakota’s will likely be enacted in every state, and possibly made uniform by a federal law that mirrors South Dakota’s law. It is our belief that uniformity should benefit the affiliate space as Advertisers and Publishers would no longer need to monitor individual states tax laws and would not need to adjust partnership arrangements to comply with various state requirements.
CJ has been actively monitoring federal and state legislation that proposes potential impact to our Advertisers and Publishers, and the full repository of each states’ tax legislation can be found here. We will continue to maintain this resource as legislation continues to evolve.
We are invested in continuing to provide strategic and thoughtful ways to introduce, nurture, and grow relationships and opportunities between our Advertisers and Publishers, and we are committed to supporting compensation and tracking options that help our clients reach their goals in a continuously evolving environment.