Wyoming Enacts Economic Nexus Legislation

Effective Date: February 1, 2019

Threshold: $100,000 or 200 or more separate transactions

Measurement Date: Current or immediately preceding calendar year

Includable Transactions: Gross sales; Marketplace sales excluded from the threshold for individual sellers

When You Need to Register Once You Exceed the Threshold: Next transaction

Wyoming has enacted economic nexus legislation pertaining to remote sellers. Effective July 1, 2017, remote sellers without a physical presence in Wyoming are required to collect and remit sales tax on sales in the state once the seller meets either of the following requirements in the current calendar year or immediately preceding calendar year:

  • The seller’s gross revenue from the sale of tangible personal property, admissions or services delivered into Wyoming exceeds $100,000, or
  • The seller sold tangible personal property, admissions or services delivered into Wyoming in 200 or more separate transactions.

Notwithstanding other provisions of the law, the Wyoming Department of Revenue may bring an action to obtain a declaratory judgment that a seller is obligated to remit sales tax. This provision is similar to the South Dakota provisions which allows the state to initiate action against remote sellers that do not register to collect the tax. Upon the filing of an action for declaratory judgment, the court shall grant an injunction prohibiting the enforcement of the collection against any seller that is party to the action. We will monitor the courts for filing by remote sellers or the state and the impact on remote sellers. It does appear that the injunction is only against sellers that are party to the action filed. The legislation also amends the definition of “vendor” to include a remote seller. (H.B. 19, Laws 2017, effective July 1, 2017)

UPDATE: On June 28, 2017, the trade associations American Catalog Mailers Association and NetChoice filed a lawsuit against the Wyoming Director of Revenue, challenging the constitutionality of the state’s economic nexus legislation. The American Catalog Mailers Association and NetChoice are challenging the legislation as being in violation of the Commerce Clause of the U.S. Constitution as interpreted by the Supreme Court in Quill v. North Dakota. The trade associations made attempts to convince Wyoming to suspend enforcement of the provision pending the decision in the South Dakota case on economic nexus but the state declined to voluntarily suspend enforcement of the economic nexus provisions. The statute included provisions that prohibit the state from enforcing the obligation to collect Wyoming sales tax against any person that is party to the action upon the filing of an action for declaratory judgment. This provision applies if the state files an action, it is unclear if the injunction will apply to this action automatically or if it will only apply to members of the two associations that filed the action. We recommend that no company voluntarily elect to collect if their only presence in the state is under these economic nexus provisions. We will continue to monitor for developments. (American Catalog Mailers Association and NetChoice v. Dan Noble, in his capacity as the Director of the Wyoming Department of Revenue)

UPDATE: The Wyoming Department of Revenue has announced that it will not enforce the economic nexus legislation, pending a legal action in which the Department is seeking a declaratory judgment from the Second Judicial District of the State of Wyoming. H.B. 19 prohibits the Department, during the pendency of the legal action, from enforcing the tax remittance obligations against any remote seller who does not consent to or otherwise remit sales tax on a voluntary basis. If a business only meets the requirement to license as a result of the economic nexus thresholds in H.B. 19, the Department cannot require the business to become licensed at this time. However, H.B. 19 does not bar a company from choosing to voluntarily license to collect and remit Wyoming sales tax. (Taxing Issues, Wyoming Department of Revenue, Excise Tax Division, Vol. 20, Quarter 3, September 2017)

UPDATE: The Wyoming Department of Revenue has issued an announcement regarding the U.S. Supreme Court decision in South Dakota v. Wayfair. The announcement states “The Department of Revenue is currently reviewing the Supreme Court’s decision to determine
how this will apply to our Statutes and our ability to require collection” and “This notice will be updated once the collection enforcement date is identified.”

UPDATE: The Wyoming Department of Revenue updated a Sales and Use Tax Bulletin on October 29, 2018 that Wyoming will begin requiring remote and online sellers, meeting the state’s economic thresholds to register and collect sales tax effective February 1, 2019, subject to court approval. However, businesses wishing to voluntarily register in Wyoming may begin that process any time.

Posted on June 28, 2018