A: On June 21, 2018 the U.S. Supreme Court found in favor of South Dakota in South Dakota v. Wayfair and determined physical presence is no longer a requirement for a state to impose sales tax collection responsibility on sellers. Physical presence meant a taxpayer had people, property or payroll within the state.

The Wayfair case introduced the Economic Nexus provisions which has significantly changed the sales tax landscape, particularly for online sellers like Neuco. Economic nexus applies to any seller which does not have physical presence in a state but meets either a gross sales and/or transaction threshold. Unfortunately, each state enacts their own legislation that defines these thresholds.

A: Since Neuco ships orders nationwide, we are now required to collect and remit sales tax in states that have adopted economic nexus standards. For orders that Neuco dropships for distributors to a state in which the distributor does not reside, we will require valid documentation, such as a resale certificate, for that state to avoid potential sales tax collection implications.

A: Currently, there are 30 states that are affected, but more states have the potential to implement new sales tax requirements.

A: At the time you place your order - whether online or by phone/fax/email - we will require you to submit a valid resale certificate or alternate state approved form for the state you ship to or we ship to on your behalf. For example, if you are a distributor located in Texas and you order a part from Neuco and want it to be shipped to a customer of yours in Alabama, we will require valid documentation from you for the state of Alabama prior to the order being placed.

A: If you do not have the appropriate documentation you will have the following options:

• Neuco can ship the product to any state that you have a valid resale certificate for (typically your home state) and not assess sales tax.
• Neuco can ship to states where you do not have valid resale certificate but we will be required by law to charge sales tax at the time of the transaction.

Any sales tax collected will not be refunded or credited back to your account.

A: You can email your documentation to tax@neuco.com.

A: Assuming Neuco already has a valid resale certificate for your business in the state which you reside (which we should), you do not need to do anything differently.

A: Contact our Sales Tax team at (800) 323-7394 or tax@neuco.com and we will assist you.

A: We know this is a new concept (it is to us as well!) and some distributors may not be up to speed on sales tax laws. Please contact our Sales Tax team at (800) 323-7394 or tax@neuco.com.