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05.23.2019 Virginia Issues Guidance for Remote Sellers Concerning Sales and Use Tax Collection Requirements By: Stephanie Lipinski Galland & Kyle H. Wingfield

The Virginia Department of Taxation issued guidelines for the new laws requiring remote sellers, marketplace sellers, and marketplace facilitators to register and collect Virginia sales and use taxes.  (See Guidelines for Remote Sellers and Marketplace Facilitators, Virginia Dept. of Tax., 05/17/2019).

Under Virginia’s new laws, remote sellers and marketplace facilitators who sell, or facilitate the sale of, more than $100,000 in annual gross revenue from retail sales or 200 annual transactions to Virginia customers must register for the collection of sales tax beginning July 1, 2019.  (See Va. Code § 58.1-612(C)).

The new law follows the United States Supreme Court’s decision in South Dakota v. Wayfair, which held that a remote seller may have economic nexus with a state for sales and use tax purposes without having a physical presence in the state.

The guidelines issued by the Department provide detail regarding Virginia’s new economic nexus laws, including key definitions, registration deadlines, sourcing rules, and examples of how the new rules operate.  Also, it states that the Department will adopt measures designed to simplify the collection, remittance, and record-keeping requirements for remote sellers and marketplace facilitators.

Please contact Stephanie Lipinski Galland or Kyle Wingfield if you have any questions regarding the new economic nexus standard in Virginia and similar laws that are being enacted by other states.