Legal Challenge to Indiana's Remote Sellers Law Resolved

Legal Challenge to Indiana's Remote Sellers Law Resolved

The legal challenge to Indiana’s law regarding remote sellers was resolved this week when an order granting voluntary dismissal was entered by the Marion Superior Court. The Indiana Department of Revenue (DOR) is set to begin enforcing the state’s economic nexus law on October 1, 2018. That said, any merchant may voluntarily register and remit sales tax to Indiana prior to October 1, 2018 through the Streamlined Sales Tax Registration System or with Indiana’s INBiz portal.

In 2017, Indiana passed House Enrolled Act (HEA) 1129, which was immediately challenged over its legality in light of the U.S. Supreme Court’s 1992 decision in Quill Corp. v. North Dakota. Quill stated sellers without a physical presence in a state were not required to collect and remit sales tax to that particular state. On June 21, 2018, the Court issued its ruling in South Dakota v. Wayfair, Inc., overturning its prior decision in Quill, such that physical presence is no longer required for sellers to be obligated to collect and remit sales taxes.

Pursuant to HEA 1129, Indiana law (IC 6-2.5-2-1(c)) requires a seller without a physical presence in Indiana to obtain a registered retail merchant’s certificate and to collect and remit applicable sales tax if it meets either or both of the following conditions in the previous calendar year or the current calendar year:

• You have gross revenue from sales into Indiana exceeding $100,000; or
• You have 200 or more separate transactions into Indiana.

 For more information regarding sales tax amongst remote sellers, visit DOR’s website.

Indiana Department of Revenue: The mission of DOR is to serve Indiana by administering tax laws in a fair, secure and efficient manner.