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Four States Have Enacted Sales Tax Nexus Legislation This Year, with Dozens of Other Bills Still Active

By Liz Malm | May 10, 2016
Topics: Tax

UPDATED: The latest legislative update on nexus is available here and background on current law can be found here.

As previously reported (here, here, and here), sales tax nexus legislation has been a major focus in state legislatures in 2016. As we first wrote back in February,

“This development is perhaps unsurprising considering the states’ frustration with the lack of action on the issue from Congress. Also supporting this trend is Justice Kennedy’s concurring opinion in DMA v. Brohl (read that here) in which he suggests that Quill may no longer represent the appropriate nexus standard for sales tax collection and says the “legal system should find an appropriate case for [the Supreme] Court to reexamine Quill.””

The topic has received widespread attention recently, with multiple suits being filed in the Sixth Judicial Circuit Court of South Dakota.

The South Dakota bill isn't the only one that's made progress, and new bills continue to crop up. Since our last update, seven new bills have been introduced in five states: Connecticut (S.B. 448), Idaho (H.B. 633), Louisiana (H.B. 1121 and H.B. 1037), Minnesota (S.B. 3093 and H.F. 3787), and Nebraska (L.R. 511). Of these, the bills in Connecticut, Idaho, and Nebraska did not pass before the states' respective sessions ended, but the Louisiana and Minnesota legislation is still active (see the table at end of blog post for links to each of these new bills).

This brings the total number of bills introduced in 2016 to 42 bills in 16 states. Of these, 17 bills in seven states remain active. Twenty-one bills in 11 states are no longer active (due to missed deadlines or sessions ending), and bills in four states have been enacted into law (Louisiana, Oklahoma, South Dakota, and Washington).

Below you'll find an inventory of all the sales tax nexus bills introduced this year, with detail regarding which have been enacted, which have made significant process, and which are no longer active.

May 20- 2016 Sales Tax Nexus Legislation

State Bill Number
(click bill number for link to bill)
Summary Recent Important Action
Alabama H.B. 116 Allows remote sellers to continue to continue participate in the Simplified Seller Remittance Program even if they establish physical nexus within the state or if the federal government removes current sales tax limitations. Did not pass before session ended.
Connecticut S.B. 448 Changes the definition of retailer engaged in business in the state to include those who purposefully direct business in the state as evidenced by frequency, quantity, and systemic nature of the retailer's economic contacts with this state. Did not pass before session ended.
Idaho H.B. 581 Changes the definition of “retailer engaged in business in this state” to include having an in-state intermediary perform certain services on the vendor’s behalf, including: regularly soliciting sales within the state, maintaining storage or distribution facilities, or facilitating the deliver or repair of sold property. Did not pass before session ended.
  H.B. 633 Changes the definition of “retailer engaged in business in this state” to include having an in-state intermediary perform certain services on the vendor’s behalf, including: regularly soliciting sales within the state, maintaining storage or distribution facilities, or facilitating the deliver or repair of sold property. Did not pass before session ended.
Illinois S.B. 2793 Shell bill titled “Creates the Marketplace Fairness Act.”  
Kansas H.B. 2603 Requires the state to inform individuals of their obligation to remit the sales tax on remote purchases. Missed crossover deadline.
Louisiana H.B. 6
(1st Extraordinary Session, not 2016 Regular Session)
Presumes sales tax nexus if a seller utilizes an in-state affiliate to advertise, promote, facilitate or refer sales or to facilitate the delivery of sales. Did not pass in Extraordinary Session.
  H.B. 30
(1st Extraordinary Session, not 2016 Regular Session)
Presumes sales tax nexus if a seller utilizes an in-state affiliate to advertise, promote, facilitate or refer sales or to facilitate the delivery of sales. Enacted.
  H.B. 96
(1st Extraordinary Session, not 2016 Regular Session)
Presumes sales tax nexus if a seller utilizes an in-state affiliate to advertise, promote, facilitate or refer sales or to facilitate the delivery of sales. Did not pass in Extraordinary Session.
  H.B. 110
(1st Extraordinary Session, not 2016 Regular Session)
Requires remote sellers to provide notice to instate purchasers that the Louisiana sales tax may be due at the time of purchase. Did not pass in Extraordinary Session.
  H.B. 113
(1st Extraordinary Session, not 2016 Regular Session)
Requires remote sellers to provide notice to instate purchasers that the Louisiana sales tax may be due at the time of purchase. Did not pass in Extraordinary Session.
  H.B. 96
(Regular Session)
Changes the definition of “dealer” and “doing business” to expand the sales tax nexus to include solicitation of business through third parties, holding a substantial ownership interest in an in state retailer, or utilizing an in-state marketplace provider.  
  H.B. 1121
(Regular Session)
Requires remote sellers to notify their buyers of any tax liability created by their purchase.  
  H.B. 1037 (Regular Session) Requires remote sellers to notify their buyers of any tax liability created by their purchase.  
Massachusetts H.B. 2628 Authorizes state taxing authorities to collect sales tax from remote sellers and reduce the sales tax rate to 5.75 percent  
  S.B. 1541 Authorizes state taxing authorities to collect sales tax from remote sellers in anticipation of federal action on this subject.  
  S.B. 1618 Changes the definition of “engaged in business in the commonwealth” to include having an in-state intermediary perform certain services on the vendor’s behalf, including: regularly soliciting sales within the state, maintaining storage or distribution facilities, or facilitating the deliver or repair of sold property.  
  S.B. 1974 Authorizes state taxing authorities to collect sales tax from remote sellers in anticipation of federal action on this subject. Passed chamber of origin in 2015 and carried over.
Minnesota S.F. 2374 Presumes sales tax nexus if a seller utilizes an in-state affiliate to advertise, promote, facilitate or refer sales or to facilitate the delivery of sales.  
  H.F. 2769 Requires out of state sellers to collect sales taxes if they engage in business with an instate marketplace provider, directly solicit business from inside the state (either directly or through software applications), or “[conduct] any part of the sale process in the state.”  
  S.F. 3093 Expanding the state's sales tax nexus standards to require tax collection from sellers who engage in direct marketing in the state, actively distributing sales materials in the state, "conducting any part of the sale process in the state," utilizing an in state marketplace provider, or contracting with an instate affiliate for business purposes.  
  H.F. 3787 Requires remote sellers to collect and remit the state sales tax if they make systematic solicitations into the state making more than 200 individual sales into the state over a one year period or if they make 20 or more unique sales totaling more than $200,000 over the same period.  
Mississippi H.B. 418 Revises the definition of “retailer,” “retail sale,” and “doing business” for the purposes of the sales tax. Died in committee.
  H.B. 1693 Redefines “doing business” to include regularly selling goods or products within the state, regularly soliciting business from potential instate customers, issuing stored value cards to instate customers, entering into franchise or licensing agreements with instate parties, or entering into transactions involving intangible personal property. The bill also implements a market-based sourcing regime that apportions income from a sold service to the jurisdiction where the benefit is received. Died in committee.
  H.B. 1676 Redefines “doing business” to include regularly selling goods or products within the state, regularly soliciting business from potential instate customers, issuing stored value cards to instate customers, entering into franchise or licensing agreements with instate parties, or entering into transactions involving intangible personal property. The bill also implements a market-based sourcing regime that apportions income from a sold service to the jurisdiction where the benefit is received. Died in committee.
  S.B. 2052 Revises the definition of “retailer”, “retail sale”, and “doing business” for the purposes of the sales tax. Died in committee.
Nebraska L.B. 1087 Presumes sales tax nexus either if any one of several criteria are met, including: a seller using an in-state affiliate to facilitate their operations, utilizing an in-state marketplace provider, or having cumulative sales into the state in excess of $10,000 in the previous year. Died in committee.
  L.R. 511 Chartering an interim study to examine existing law governing the collection of sales and use tax on remote sales. Did not pass before session ended.
Ohio H.B. 232 Presumes sales tax nexus if a seller utilizes an in-state affiliate to advertise, promote, facilitate or refer sales or to facilitate the delivery of sales.  
Oklahoma H.B. 2925 Presumes sales tax nexus if a seller utilizes an in-state affiliate to advertise, promote, facilitate or refer sales or to facilitate the delivery of sales. Missed crossover deadline.
  S.B. 1251 Specifically requires all remotes sellers to collect and remit the state sales tax if they have in-state gross annual receipts in the state in excess of $1 million. Passed Senate. Currently in House.
  S.B. 1301 Presumes sales tax nexus if a seller utilizes an in-state affiliate to advertise, promote, facilitate or refer sales or to facilitate the delivery of sales. Passed Senate, currently in House.
  H.B. 2531 Presumes nexus within the state if a seller maintains a continuing relationship with an in-state third party that sells a similar line of products, bears similar trademarks as the seller, or facilitates in the delivery, installation, or maintenance of seller’s goods. Enacted.
Rhode Island H.B. 7230 Changes the definition of “retailer” to specify that referring customers to a retailer only through a link on a website does not constitute nexus for purposes of the sales tax. Died in committee.
  H.B. 7375 Presumes sales tax nexus either if any one of several criteria are met, including: a seller using an in-state affiliate to facilitate their operations, utilizing an in-state marketplace provider, or having cumulative sales into the state in excess of $10,000 in the previous year. Died in committee.
South Dakota S.B. 106 Stipulates that an out of state seller has nexus with the state for sales tax purposes if their gross revenue from sales into the state exceeds $100,000 in the previous year or if they engaged in 200 or more separate transactions. Enacted.
Utah H.B. 235 Presumes sales tax nexus if a seller utilizes an in-state affiliate to advertise, promote, facilitate or refer sales or to facilitate the delivery of sales. Did not pass prior to session ending.
  S.B. 65 Requires the owner of every in-state selling platform to file an annual report with the state of each seller who uses the platform, but does not collect the sales tax. Missed crossover deadline.
  S.B. 85 Presumes sales tax nexus if a seller utilizes an in-state affiliate to advertise, promote, facilitate or refer sales or to facilitate the delivery of sales. Missed crossover deadline.
  S.B. 182 Creates a rebuttable presumption that a seller of goods or services has nexus if they have in-state affiliates who facilitate the delivery, installation, assembly, maintenance of their sales; if the affiliate shares management, business system, or employees with the seller; of if the affiliate and the seller share intercompany transactions. Did not pass prior to session ending.
Washington H.B. 2224 Repeals the nonresident sales and use tax exemption. Missed crossover deadline.
  H.B. 2938 Prohibits the state from considering the attendance at a single in-state trade convention per year sufficient to establish nexus with the state. Enacted.