Number of States with Economic Nexus Standard for Sales Tax More Than Doubles Per Annual Bloomberg Tax State Tax Survey

Arlington, Va. (May 13, 2019) —Thirty-three states responded that they have an economic standard in place for sales tax nexus, indicating a major shift to economic nexus for sales tax in the wake of the Supreme Court’s seminal ruling in South Dakota v. Wayfair. This is more than double the number found in the 2018 survey and it is among the key findings of the 19th annual Bloomberg Tax Survey of State Tax Departments, which incorporates input on a variety of topics from all 50 states, Washington, D.C., and New York City.  An executive summary of the survey is available at

The survey focuses on federal tax reform’s impact on state income, state sourcing provisions, the transition to economic nexus, and state policy for marketplace facilitators. The survey also explores the implications of South Dakota v. Wayfair, which created new challenges for states and businesses related to determining what is included in new economic nexus threshold calculations.

“There are so many nuances, grey areas, and unknowns that must be considered for state tax determinations,” said Fred Nicely, senior tax counsel for the Council on State Taxation. “This survey highlights the complexities and demonstrates why state tax compliance is not simply a matter of getting a computer program to do all the calculations.”

“This year’s survey once again illuminates the challenges and opportunities for businesses as they navigate the ever-evolving state tax landscape,” said Christine Boeckel, deputy editorial director, Bloomberg Tax. “States are considering a variety of ways to respond to Wayfair as well as the impacts of federal tax reform, which makes tax planning and compliance across multiple jurisdictions even more complicated. For decades, tax professionals have relied on Bloomberg Tax to keep abreast of these changes. For carrying out this work, our annual survey is a key resource for our subscribers.”

Additional survey findings include:

  • Thirteen states said they require third-party marketplace facilitators such as eBay and Etsy to collect and remit sales tax on sales made by out-of-state corporations using the facilitators’ platforms.
  • Twenty-seven states said they conform to § 163(j), which limits the business interest expense deduction.
  • Twenty-five states said they conform to the inclusion of global intangible low-taxed income (GILTI) under § 951A.
  • Only 11 states said they conform to the deduction for qualified business income under § 199A.
  • Fourteen states said they make adjustments, determine imputed tax, and assess and collect tax at the entity level for partnerships, while 27 states said they do so at the owner level. Ten states said they do so at both levels.

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