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Canadian companies selling into the United States – even those with no physical presence in a particular state – may now be required to collect and remit local sales taxes.

The expansion of U.S. states’ taxing powers emerges from a recent decision of the Supreme Court of the United States (SCOTUS) in South Dakota v. Wayfair, Inc., which expressly overturned SCOTUS’s 1992 decision in Quill Corp. v. North Dakota.

The upshot is that it’s not clear whether thresholds below those in the South Dakota law that drove Wayfair would be constitutional. Until or unless that’s clarified by legislation or further decisions, Canadians shipping into the United States will be in a bind.

Lexpert contributor Julius Melnitzer reports at www.lexpert.ca. Follow @Lexpert on Twitter. Lexpert is published by Thomson Reuters.

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