THE TRANSATLANTIC MAGAZINE
THE TRANSATLANTIC MAGAZINE
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Supreme Court ruling impacting non-US companies selling into American markets
Financial experts at US Tax and Financial Services are warning of additional state taxes for non-US companies selling into the American market
Financial experts at firm US Tax and Financial Services have highlighted a US Supreme Court decision made in June 2018 which could, in the months, weeks or even days ahead, make a big difference to non-US companies who are selling into the American market.
Darlene Hart and James Debate have written an article explaining that the Supreme Court ruling, South Dakota v. Wayfair, "is considered precedent-setting because of its finding that US states may charge tax on purchases made to individuals and businesses within their borders by out-of-state sellers, even if these sellers don’t have a physical presence in the state ... Until the Supreme Court’s decision, states had the authority to impose a sales tax collection obligation only on businesses that were physically present within their borders ... The 'Wayfair decision' is seen as affecting e-commerce companies in particular, as many of these businesses have enjoyed a significant competitive advantage over their bricks-and-mortar retail rivals until now, because of this physical presence requirement."
The article says that "Businesses that currently sell into the US market, therefore, are recommended to make plans at once to begin collecting and paying sales taxes in the states into which they now sell." However, the article also notes the fluidity of current developments, by explaining that "Things could change again, however, so it will also be important to stay abreast of developments ... Concerns that the Wayfair ruling could end up stifling cross-border trade, for example, have prompted some to call on Congress to step in and regulate the way the new interstate taxing is carried out."
If you're a non US business selling into the American market, it's worth keeping up to date with these changes and regulations and understanding how they may affect you going forward.
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