Wisconsin has enacted a new law that eliminates the state’s 200 transaction economic nexus threshold for remote sellers. Effective February 20, 2021, a remote seller is only required to collect and remit sales or use tax if its gross sales into Wisconsin exceed $100,000 in the previous or current calendar year.
The 200 transaction economic nexus threshold and year-end for federal income tax purposes apply through February 19, 2021. In other words, if a remote seller was required to register only due to meeting number of transactions threshold in the previous year, they have collection requirements through February 19, 2021. On February 20, 2021, the remote seller may inactivate its use tax registration certificate (assuming its gross sales are less than $100,000).
Periods January 1, 2021 through February 19, 2021 and January 1, 2020 through December 31, 2020 would use both the gross sales and number of transactions thresholds and fiscal year end (FYE) prior to the law change. If a remote seller was operating on something other than a calendar year end, they should look at their calendar year gross sales on February 20, 2021 to determine if they qualify for the small seller exception.
The Wisconsin Department of Revenue has provided several examples that illustrate when a remote seller is required to collect and register to collect Wisconsin sales or use tax in light of the February 20, 2021 law change on their Registration and Collection Dates for Remote Sellers page. (A.B. 2/Act 1, Laws 2021, effective February 20, 2021)