Remote Sellers - Wayfair Decision
Table of Contents
EFFECTIVE OCT. 1, 2018 – NEVADA REQUIRES REMOTE SELLERS TO COLLECT SALES TAX
What is the effect of the Wayfair decision?
The United States Supreme Court ruled in South Dakota v. Wayfair on June 21, 2018, that states can require Remote Sellers to collect and remit the applicable sales or use tax on sales delivered to locations within their state – regardless of whether the seller has a physical presence in the state.
Consistent with the Wayfair decision, Nevada has adopted regulations that establish requirements for Remote Sellers that make retail sales into Nevada.
Who is a Remote Seller?
- A “Remote Seller” is a seller that does not have a physical presence or that had no other legal requirement to register and collect the applicable sales or use taxes in the state.
Are all Remote Sellers required to register in Nevada, or are there exceptions for small sellers?
Remote sellers are only required to register and collect Nevada sales or use tax if, in the previous or current calendar year, they have:
- More than $100,000 of retail sales into Nevada, or
- 200 or more separate retail transactions for delivery into the state
- However, these small sellers may still volunteer to register and collect tax in this state as a benefit to their Nevada customers.
When must a Remote Seller be registered in Nevada?
Nevada’s new rules went into effect October 1, 2018.
- Once a Remote Seller hits the threshold described above (>$100,000 in retail sales or 200 or more retail transactions for delivery into Nevada in the previous or current calendar year), they must register by the first day of the calendar month that begins at least 30 calendar days after they hit the threshold.
- Sales tax must be collected beginning with retail sales on that date but does not need to be collected on sales made prior to that date.
- For example, if a Remote Seller has already met the threshold on October 1, 2018, they must register and begin collecting sales tax on retail sales by November 1, 2018.
- Some Remote Sellers may wish to register and begin collecting and remitting sales tax before they meet the threshold. They may do that at any time.
How do Remote Sellers register to collect and remit Sales & Use tax for Nevada?
- The best way for Remote Sellers to register to begin collecting and remitting Nevada’s Sales & Use taxes is through the Streamlined Sales & Use Tax Registration System.
- This allows sellers to register for all “Streamlined states” in one place. Many of those states will also require Remote Sellers to collect and remit Sales & Use taxes (there are currently 23 full member states).
- Alternately, a Remote Seller can register directly with Nevada. The simplest way to do this is using Nevada Tax Center, the same online system that can be used to file and pay Sales & Use tax.
Are Remote Sellers that are already registered in Nevada affected by the Wayfair decision?
- Remote sellers that were registered prior to the Wayfair decision are not impacted by this decision and should continue to collect and remit the applicable sales or use tax as they have in the past.
- Note: If the Remote Seller does not collect and remit the applicable sales or use tax, the purchaser is still responsible for reporting and paying the tax directly to Nevada.
Are Remote Sellers that meet the Nevada retail sales threshold required to collect and remit tax on all retail sales made into Nevada, including those made over the Internet?
- Yes. Remote Sellers that meet the Nevada retail sales threshold in the current or preceding calendar year are required to collect and remit the tax on all taxable retail sales made for delivery into Nevada, including those retail sales made over the internet that are sent to Nevada.
- Note: The Internet Tax Freedom Act, originally enacted in October 1998 and made permanent on February 24, 2016, does not prohibit Nevada from taxing sales made over the Internet.
Are Remote Sellers liable for tax on retail sales into Nevada that were made prior to Nevada’s new requirements?
- If the Remote Seller is required to register, collect, and remit the tax solely because of the Wayfair decision, the Remote Seller is not liable for the sales tax on sales into Nevada that occurred prior to the effective date of Nevada’s new requirements.
What is a Certified Service Provider (CSP)?
- A Certified Service Provider (CSP) is an agent certified under the national Streamlined Sales & Use Tax Agreement to perform all the seller’s Sales & Use tax functions, other than the seller’s obligation to remit tax on its own purchases.
- A CSP is designed to allow a business to outsource most of its sales tax administration responsibilities.
- List of Certified Service Providers
How often does Nevada require Remote Sellers to file Sales & Use tax returns?
- If a Remote Seller is registered through the Streamlined Sales & Use Tax Registration System and uses a CSP (see above question & answer for CSP description) to perform its Sales & Use tax functions (i.e., CSP Services), the CSP will file monthly Sales & Use tax returns on behalf of the Remote Seller.
- For a remote seller that will file their own Sales & Use tax returns, and whose taxable sales do not exceed $10,000 per month, the filing frequency is quarterly.
How do Remote Sellers file Sales & Use tax returns in Nevada?
- If a Remote Seller is registered directly with Nevada and is submitting their own Sales & Use tax returns, they can download and file paper returns or use Nevada Tax Center, the Department’s online filing system.
- If you use a CSP – see the above question & answer.
How do Remote Sellers file Sales & Use tax returns in Nevada?
- If a Remote Seller is registered directly with Nevada and is submitting their own Sales & Use tax returns, they can download and file paper returns or use Nevada Tax Center, the Department’s online filing system.
- If you use a CSP – see the above question & answer.
Does the Wayfair decision create a new tax in Nevada?
- No. Nevada’s new rules following Wayfair extend the requirement to collect and remit sales tax to Remote Sellers.
- Prior to Nevada’s implementation of Wayfair rules, retailers were not required to collect sales tax unless they had a physical presence in the state.
- However, sales into Nevada were still taxable: purchases made in Nevada from out-of-state retailers were subject to Nevada’s use tax, which the purchaser was liable for remitting to the Department when no sales tax was collected by the retailer.
- Again, following Wayfair, the seller must now collect and remit sales tax on those sales into Nevada.
Are Remote Sellers required to collect both the state and local Sales & Use taxes?
- Yes. Remote Sellers registered in Nevada to collect and remit Sales & Use taxes are required to collect both the state and local sales or use taxes that apply to the transaction.
- In Nevada, the local taxes are collected and reported at the same time as the state sales tax and all are remitted to the state.
Will Remote Sellers be subject to audits by the Department?
- Remote Sellers are subject to audit, just like any other seller.
Does the Wayfair decision affect purchasers in Nevada?
- Purchasers in Nevada may see an increased number of Remote Sellers that begin charging the applicable state and local sales or use tax.
- This will help reduce the number of purchases each individual purchaser is required to track and remit the use tax on directly to the Department.
- However, if a Remote Seller does not charge the appropriate state and local tax on a taxable item in Nevada, the purchaser is still responsible for reporting and paying the applicable use tax on the purchase price directly to the Department.
Note: FAQs are for general guidance only. For written advice as it relates to your business, request an advisory opinion from the Department.