Business Update: Supreme Court Decision Expands Applicability of State Sales Tax

Sunday July 1, 2018 Published in Corporate and Business
Push Pin in Ohio

The United States Supreme Court recently issued a decision in South Dakota v. Wayfair, Inc. which will drastically change the applicability and imposition of sales taxes throughout the United States.

Prior to this decision, States could not enforce sales taxes against a business unless that business had a physical presence in the State. However, in Wayfair, the Court decided that while a business must have a significant connection to a State in order for it to impose sales taxes, a significant economic presence is enough to satisfy this requirement–and a physical connection is not necessary. This means that a State may now impose sales taxes on businesses that are not physically present in the State, if those businesses have a significant economic presence in the State. A business may have a significant economic presence in a State through numerous ways, including selling products online or otherwise offering services to residents of that State.

Since this decision was issued on June 21, 2018, fifteen States have already passed laws in accordance with it, with more States to follow. Going forward, businesses which engage in any business operations across state lines should ensure that they are complying with these new sales tax laws, or risk incurring significant consequences.

Wegman Hessler specializes in business law for business leaders, applying legal discipline to solve business problems to help business owners run smarter. For more than 50 years, this Cleveland business law firm provides full-service strategic legal counsel for closely held businesses. Learn more at

Related Stories

Wegman Hessler business lawyer Mary Dennison

Attorney Mary Dennison Joins Cleveland Law Firm Wegman Hessler

Cleveland, Ohio – Mary E. Dennison, Esq., has joined the Cleveland law firm Wegman Hessler as Associate Attorney. Mary is part of the Business Services team at Wegman Hessler joining…

Read More

Nathan Hessler named Managing Partner of Wegman Hessler

Also recognized as Distinguished Alumni of Lutheran West H.S. Cleveland, Ohio – January 17, 2022 – Members of the board of directors of the Cleveland business law firm Wegman Hessler…

Read More

Corporate Update: Summary of the Corporate Transparency Act

The Corporate Transparency Act (the “Act”) comprises one section of the National Defense Authorization Act. The purpose of the Act is to provide the federal government information pertinent to identifying…

Read More