Ohio is preparing to replace its "cookie nexus" statute with an economic nexus bill and join other states in implementing a South Dakota-style remote seller law, according to a state lawmaker.
The state remains one of the few Streamlined Sales and Use Tax Agreement signatories that has not acted on the Supreme Court's June decision in South Dakota v. Wayfair Inc., but that may change soon, state Rep. Gary Scherer (R) said October 3.
Speaking at the Streamlined Sales Tax Governing Board’s meeting in St. Louis, Missouri, Scherer confirmed that draft legislation is being circulated that mimics the language and thresholds found in South Dakota’s S.B. 106. “We’re basically copying theirs,” he said. “Whether this gets passed during our lame-duck session or gets built into next year’s budget is yet to be seen.”
Ohio's cookie nexus law, enacted as part of the state's 2018–2019 fiscal biennial budget, was scheduled to take effect on January 1, 2018. However, the measure was challenged by the American Catalog Mailers Association in December 2017, and the case continues to languish in the Franklin County Court of Common Pleas.
Laura Stanley of the Ohio Department of Taxation said that passing economic nexus legislation would be necessary. “Ohio believes that legislation needs to occur in the state before we can implement a specific Wayfair economic presence standard,” she told the governing board.
Stephen Kranz of McDermott Will and Emery asked Scherer whether Ohio is also considering jettisoning its cookie nexus law to proceed with a “clean slate” on a pure economic nexus approach. “Yes,” Scherer replied.
Wyoming is another state that has yet to take advantage of the Wayfair decision. Dan Noble, governing board president and director of the state Department of Revenue, said Wyoming continues to be hamstrung by litigation with remote sellers, including Wayfair, over its South Dakota-style statute. “I can’t really give an implementation date until we have negotiated that case,” Noble told the board, but he did say the state is "fairly close" to announcing a date.
Noble also said he couldn’t guarantee that Wyoming would give vendors flexibility if the implementation date is soon after the announcement. “We can’t give people forever to do this,” he said, noting that the state is already 100 days behind the Wayfair decision.
But Kranz said that giving vendors some flexibility before the announcement is expected to help them comply with the law. It could also help remote sellers avoid confusion, according to the Nevada Department of Taxation's deputy executive director, Paulina Oliver.
Oliver said that Nevada missed the deadline to implement its remote seller regulations by October 1, adding that although the state hasn't announced it, she thinks the deadline will be November 1.
Her statement, however, was challenged by David Campbell, CEO of certified service provider TaxCloud. “Nevada issued a press release on September 27th that did say October 1st as the start date,” he said. “Is October 1st the date, or is it not the date?”
Oliver replied that she was initially led to believe November 1 was the implementation date, but conceded that the Nevada implementation date is October 1. “I guess they have more information than I did,” she said.