Question

Brad Carlton operates Carlton Collectibles, a rare-coin shop in Washington, D.C., that ships coins to collectors in all 50 states. Carlton also provides appraisal services upon request. During the last several years the appraisal work has been done either in the D.C. shop or at the homes of private collectors in Maryland and Virginia.

Determine the jurisdictions in which Carlton Collectibles has sales tax nexus, assuming these states have enacted Wayfair legislation.
a. Washington, DC
b. Maryland
c. Virginia

Answer 1

Carlton Collectibles has sales tax nexus in Washington, DC, where it operates, and in Maryland and Virginia, where it conducts appraisal services. These jurisdictions would require Carlton Collectibles to collect and remit sales tax following Wayfair legislation.

Step-by-step explanation:

sales tax nexus:

Sales tax nexus refers to the connection between a seller and a state that requires the seller to collect and remit sales tax in that state. Based on the information provided, we can determine the jurisdictions in which Carlton Collectibles has sales tax nexus under Wayfair legislation. These jurisdictions would include a) Washington, DC, because Carlton Collectibles operates there, b) Maryland, and c) Virginia, because Carlton conducts appraisal services in these states.

Following the South Dakota v. Wayfair, Inc. decision in 2018, many states adopted economic nexus laws. Such laws assert that a business can establish nexus through a certain level of sales, or number of transactions within the state. Physical presence through the provision of services or having a store location, as is the case with Carlton Collectibles in Washington, DC, Maryland, and Virginia ensures nexus is established, necessitating sales tax collection and remittance by Carlton Collectibles in these jurisdictions.