For many software-as-a-service (SaaS) providers, sales tax compliance remains a challenge. Approximately 20 U.S. states currently subject SaaS to tax, and taxability varies from state to state, which impacts many SaaS companies that scale rapidly and unknowingly expand their nexus footprint into these states.
In South Dakota v. Wayfair, Inc., the U.S. Supreme Court held that states may assert nexus on an out-of-state business that exceeds a reasonable economic threshold, regardless of whether the business has a physical presence in the state.
Source BDO
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