Manufacturers Face New Sales Tax Obligations in an Increasingly Digitized Economy

January 23, 2019


A series of United States Supreme Court rulings over the past half-century limited manufacturers’ sales tax compliance obligations. The Court consistently dictated that states could not require businesses to collect and remit sales tax unless they had physical presences there—in other words, property owned or people based within state borders.

But all this has changed as technology continues to transform and revolutionize industries, including multi-channel manufacturing. Over the past three decades, e-commerce exploded, as the internet became a common household tool across the globe. Traditional brick-and-mortar retailers have been forced to adapt to new practices or die. Meanwhile, e-commerce-centric businesses and direct-to-consumer manufacturers have thrived amid this new globally-connected economic climate, without the burden of state regulatory constraints related to sales tax compliance.

Now, states are getting in on the action and looking for their share of the revenue.

[Read on for more about how manufacturers can prepare for new sales tax obligations in this article from Sovos Directory of Regulatory Analysis Charles Maniace.] 


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