TaxByte: Wisconsin Eases Economic Nexus Requirements by Removing 200 Transaction Threshold

by | Feb 24, 2021 | Tax Bytes

Wisconsin has revised its economic nexus law and has eliminated the requirement that businesses collect and remit sales tax if their only presence in the state is having more than 200 transactions per year.

This is great news for small businesses who crossed the 200 transaction count threshold, but not the $100,000 gross sales threshold. The result of this change is that fewer small businesses will need to comply with Wisconsin’s burdensome sales tax laws. The $100,000 gross sales economic nexus threshold still applies. You can read more about the change in Wisconsin Tax Bulletin 212-02-21.

A remote vendor is only required to register and collect tax as a result of the Act if its gross sales to Wisconsin in the previous or current calendar year exceed $100,000. The Act eliminates the 200-transaction threshold to determine whether a Wisconsin remote-seller has economic nexus and is required to register and collect sales and use taxes in Wisconsin. A remote seller is also required by the Act to use a calendar year to determine whether it crossed the $100,000 threshold. 

Under prior law, if an out-of-state business had 200 or more separate sales transactions to Wisconsin or exceeded $100,000 in gross sales to Wisconsin in the previous or current taxable year of the remote seller for federal income tax purposes, an out-of-state retailer whose only Wisconsin operations were making remote sales to Wisconsin (remote seller) had to register and collect Wisconsin sales and use taxes.

You can see each state’s economic nexus thresholds in our up-to-date spreadsheet here.

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Disclaimer: Our attorney wanted you to know that no financial, tax, legal advice or opinion is given through this post. All information provided is general in nature and may not apply to your specific situation and is intended for informational and educational purposes only. Information is provided “as is” and without warranty.

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