ExpertHard1 markMultiple Choice
CPA · Question 70 · Area V: Entity Taxation
Which of the following creates 'nexus' for sales tax purposes under the Supreme Court's Wayfair decision?
Which of the following creates 'nexus' for sales tax purposes under the Supreme Court's Wayfair decision?
Answer options:
A.
Only physical presence in the state.
B.
Economic presence exceeding certain thresholds (e.g., transaction volume or sales revenue).
C.
Solicitation of orders by mail only.
D.
Owning a warehouse in the state.
How to approach this question
Wayfair = Economic Nexus (Sales numbers matter, not just buildings).
Full Answer
B.Economic presence exceeding certain thresholds (e.g., transaction volume or sales revenue).✓ Correct
B
South Dakota v. Wayfair (2018) overturned the physical presence rule (Quill), allowing states to require remote sellers to collect sales tax based on 'economic nexus' (e.g., >$100k sales or 200 transactions).
Common mistakes
Thinking physical presence is still the only standard.
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