The Equipment Dealers Association (EDA) and HBK CPAs & Consultants are concerned about the unintended consequences and potential implications the Supreme Court decision in South Dakota v. Wayfair may have on equipment dealers throughout the U.S.
The decision, overturning 1992 precedent, means that South Dakota can now collect sales tax from businesses operating outside of the state. Framed as a decision that impacts online retailers only, Rex Collins, Principal with HBK CPAs & Consultants, urges equipment dealers to be aware as this ruling has potentially devastating consequences for their businesses.
His main concerns include:
· It is very reasonable to assume that other states, especially those with similar economic nexus statutes as South Dakota, will pass similar bills.
· Economic nexus limits (typically $100,000 – $250,000) are easily met by dealers.
· Cost of compliance could be extensive. Dealers will likely need to hire personnel or outside firms to handle state and local sales and income tax filings.
· Additional costs may include registrations and licenses to do business in various states and their annual renewals.
· Possibility of paying income tax in a state where your business does not operate a store but sold a piece of equipment.
Collins and EDA invite dealers to participate in a free webinar on Thursday, July 19th at 11:00 am EST for an in-depth review of South Dakota v. Wayfair and its significance for the industry.