Multistate Tax Commission Voluntary Disclosure Deadline Extension

Due to overwhelming demand of businesses wanting to participate in the program, the Multistate Tax Commission has extended the application and registration deadlines for its voluntary disclosure initiative for online marketplace sellers from October 17 to November 1, 2017. The program provides relief from tax liability, interest, and penalties for sales and use tax, income/franchise tax, or both. Taxpayers filing a timely application are now allowed 30 days after receiving notice that the taxing state has signed a voluntary disclosure agreement to register with the state.

Read more about the MTC program in our first update and the expansion of states included in the program in our second update.

Please talk with your Eide Bailly tax professional or a member of our State and Local Tax Team if you’re considering participating the program

SD Case petitions the U.S. Supreme Court

As previously noted, states’ push to obtain tax revenue from remote sales has been a hot topic this year. Recently, the South Dakota Supreme Court issued their opinion in the case of The State of South Dakota v. Wayfair, Inc., Overstock.com, Inc., and NewEgg, Inc. The court opinion stated that “Quill remains the controlling precedent on the issue of Commerce Clause limitations on interstate collection of sales and use taxes.”

The State of South Dakota took action immediately and on October 2, 2017, filed a state petition asking the U.S. Supreme Court to reconsider the 25-year-old Quill opinion. This is the first state petition of its kind but unlikely to be the only one.

“The retail landscape significantly changed with the inception of the internet and access to online shopping. Federal law currently shields out-of-state businesses from remitting the same taxes as South Dakota businesses,” said State Attorney General Marty Jackley in a press release announcing this petition.

Colorado and Alabama have pushed back against Quill Corp. v. North Dakota. Other states are imposing use tax notification and reporting requirements for out-of-state sellers in order to work around the physical presence precedent upheld by Quill. Some are enacting a tax on marketplace providers.

It’s clear that this will only be the start of cases asking the U.S. Supreme Court to revisit Quill.