Last week, Senate Bill 620 (SB 620) was introduced in the Hawaii Senate. This legislation has nexus implications for remote sellers. Currently, Hawaii requires persons engaging in business and other activities in Hawaii to report and pay the general excise tax. If enacted, SB 620 would expand the definition of “engaged in business” to include remote sellers, with no physical presence, who have gross receipts from Hawaii sales totaling at least $100,000.
Hawaii joins several other states that have taken recent steps to enforce tax collection by remote sellers. Please see Ryan tax developments South Carolina and Minnesota Introduce Legislation in an Effort to Enforce Tax Collection by Remote Sellers and New and Updated Information on States’ Legislative Efforts to Enforce Tax Collection by Remote Sellers for further discussion on this topic.
E-commerce continues to grow exponentially, and we see its effect by the amount of store closings announced by retailers. It’s safe to say the retail landscape has now fully changed. Successful retailers will deploy a combination of a leaner physical location count and maximize their investment dollars into their e-commerce platforms. We will continue to monitor retail sales trends and more specifically e-commerce activity and will provide updates as developments occur.