Several states are now moving from a strict physical presence test towards an economic presence test.

Question

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Several states, such as South Carolina, Alabama, and California, have adopted or proposed an economic presence test as the standard for collecting sales tax from remote sellers. This means that businesses, even if they do not have a physical presence in a state, may still be liable to collect and remit sales tax if they meet certain economic thresholds.

Several States Are Now Moving from a Strict Physical Presence