The Indiana Department of Revenue has provided further guidance in light of the US Supreme Court’s recent Wayfair decision overruling Quill’s physical presence nexus standard. In July of 2017, Indiana passed a law requiring out-of-state sellers to comply with Indiana’s sales tax laws if those sellers (in either the previous or current calendar year) have:
- Gross revenue from sales into Indiana exceeding $100,000; or
- 200 or more separate transactions into Indiana.
At the time this rule was passed, it violated the Supreme Court’s physical presence standard in Quill. The Department is currently prohibited from enforcing their sales tax requirements on remote sellers. This prohibition will remain in place until a declaratory judgment currently pending in Indiana is resolved. Additionally, the Department states that remote sellers are not obligated to register or collect Indiana sales tax until the declaratory judgment is resolved, “that said, any merchant may voluntarily register and remit sales tax to Indiana.”
The Department is continuing its process of analyzing the implications of the Supreme Court’s decision in Wayfair, and it is “committed to being transparent in working with the business community to implement this historic decision.”
The Department states that it will be providing frequent updates on this subject and recommends checking its website for “updated FAQs and guidance to help you understand how Indiana’s laws and filing requirements apply to you.”
Additional information can be found on Indiana’s website here.
The Barnes Dennig team will continue to monitor these developments and keep you informed as further guidance becomes available. Please contact a member of the Barnes Dennig tax team if you have any questions about the status of Indiana’s sales tax law, or other states’ nexus rules after the historic Wayfair, we would love to discuss these issues with you, as well as how they may impact your business.