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Experts: Supreme Court’s ‘Wayfair’ Ruling Will Have Broader Impact on Taxes Than Real Estate

Real Estate NJ

July 17, 2018

As seen in this article, "A recent ruling by the U.S. Supreme Court will likely raise the cost of some online sales and provide an infusion of revenue for New Jersey’s state coffers, but its impact on commercial real estate may be limited.

"The 5-4 opinion in the case, South Dakota v. Wayfair, ruled that online retailers must collect sales tax from customers even in states where they don’t have a physical presence. In the process, the court overturned a 26-year-old standard for e-commerce and effectively closed a loophole that has long been seen as a disadvantage to brick-and-mortar retailers.

"While the change may have been imminent, especially in light of the explosive growth of e-commerce, experts say the Wayfair ruling has created uncertainty in other areas. Jaime Reichardt, an attorney with Sills Cummis & Gross PC, noted that states began to push back on the physical presence test over the years, prompting South Dakota and others to adopt rules for sellers that earn above a certain 'bright line' of sales to determine their economic nexus.

“ 'I think the Wayfair decision, while it answered the question of ‘Do we need a physical presence in the state?’ it left more questions than answers,' said Reichardt, who chairs Sills Cummis’ state and local tax practice. 'At the very least, in a Quill world … we knew there was a rule — physical presence or not — and we had a bright line, no-questions-asked rule.'”