New economic nexus law enforcement affecting remote sellers with annual Mississippi sales in excess of $250,000

Remote sellers with annual Mississippi sales in excess of the $250,000 small seller exception should register for a Mississippi Use Tax Account and begin collecting tax no later than September 1, 2018.

The United States Supreme Court issued its decision in South Dakota v. Wayfair, Inc. on June 21, 2018. This decision struck down the requirement that a vendor must have “physical presence” in a state to be subject to state sales and use tax collection requirements.

Mississippi’s rule took effect December 1, 2017, but has never been actively enforced because of the physical presence rule. Now that the Supreme Court has repealed the physical presence limitation, the Mississippi Department of Revenue has issued guidance for online or remote sellers who have economic nexus with the state.

Out-of-state sales into the state

Sellers who have no physical presence in Mississippi but who purposefully and systematically exploit the Mississippi market and meet or exceed the $250,000 small seller exception during the prior 12-month period must register with the Department of Revenue by August 31, 2018, and begin collection of Mississippi use tax for sales into the state made on or after September 1, 2018 (Mississippi Code Ann. Section 27-67-4(2)(e)).

Exploiting the Mississippi market purposefully or systematically

There are different ways of exploiting the Mississippi market, including, but not limited to:

• Television or radio advertising on a Mississippi station
• Telemarketing to Mississippi customers
• Advertising on any type of billboard, wallscape, bus bench, interiors and exteriors of buses, or other signage located in Mississippi
• Advertising in Mississippi newspapers, magazines, or other print media, emails, texts, tweets, and any form of messaging directed to a Mississippi customer, online banner, text, or pop-up advertising directed toward Mississippi customers
• Advertising to Mississippi customers through applications “apps” or other electronic means on customers’ phones or other devices
• Direct mail marketing to Mississippi customers

Sellers with a substantial economic presence in Mississippi must state the tax separately from the sales price on invoices, and account for the tax separately on sales receipts.

Economic nexus by state

In addition to Mississippi and South Dakota, the following states have adopted economic nexus policies: Alabama, Connecticut, Georgia, Hawaii, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, Nebraska, New Jersey, North Carolina, North Dakota, Tennessee, Utah, Washington, Wisconsin, and Wyoming.

Many more states have affiliate or click-through nexus laws, including California, New York, and Texas.

Need to simplify your sales tax compliance?

Sales tax automation software can be integrated into your retail point of sale or online ecommerce software solutions to make managing your sales tax compliance and calculations easy. With automation software you can rest assured you’ll collect the right tax for each state where you have nexus. Our Celerant POS software and ecommerce solutions integrate with Avalara for sales tax compliance. For more information, please visit www.celerant.com/avalara.