This site uses cookies. and this alert will appear once and then not again.

Much has changed in US tax reform legislation with the Wayfair ruling and the Tax Cuts and Jobs Act (TCJA updates). In the world of state and local tax, we see many developments each year, but these two events stand out by changing the landscape for taxpayers across industries.

The Wayfair decision didn’t just give rise to widespread adoption of remote seller nexus and marketplace facilitator collection requirements. It also resulted in a new framework where there are many sellers collecting tax and states are pushing to expand their collection requirements and their tax bases. New compliance responsibilities are accompanied by a focus on local tax compliance and sourcing—both challenging areas especially for sales of services, digital products, and software.

The TCJA prompted an initial flurry of activity around tax conformity matrices and fitting old state tax constructs into a new federal and international tax paradigm. This was followed by lengthy regulations on these new provisions and then amendments, including retroactive changes under the CARES Act. Now, businesses are dealing with expiring tax provisions, further changes such as the corporate book minimum tax, and the rollout of Pillar Two implementation. All of these significant developments and businesses’ responses to them continue to have a major impact on state taxation.

Five years after Wayfair and the TCJA, state tax professionals should be watchful, insightful, and resourceful. Certainly there are challenges but in meeting these challenges, savings and opportunities may be uncovered.