National Taxpayer’s Union’s Andrew Wilford and WILL’s Lucas Vebber write at the Wisconsin State Journal how tax policy should be the exclusive purview of the state legislature and not bureaucrats.
Yet Wisconsin is threatening to make a bad situation even worse. Having previously drafted tax legislation that failed to include an exception for small sellers, the state’s Department of Revenue simply inserted it in by administrative fiat.
The Supreme Court’s Wayfair decision indirectly blessed South Dakota’s economic nexus law, which included a small-seller exception set at $100,000 in revenues or 200 transactions. Fearful of a constitutional challenge without including a small-seller exception, Wisconsin’s Department of Revenue copied these numbers and plugged them in to the regulations they began enforcing Oct. 1.
Doing so puts Wisconsin’s regulations on shaky legal ground. Those firms already struggling to cope with a complex and changing tax landscape now must also handle the question of whether Wisconsin’s small-seller exception is legally sound, given its bureaucratic origins. And even if the exception remains, questions still abound — for example, do tax-exempt sales count toward the small-seller threshold? The problem with vague and hastily written bureaucratic actions is they often fail to address the nuance inherent in something as complicated as tax law.