The Game Lawyer Blog

Sales tax on Online Game Sales – the Supreme Court weighs in

Do you sell your board games or video games online to other states in the US?

You may be on the hook for collecting and paying sales tax very soon.

Jamey Stegmaier of Stonemaier Games reached out to me last week to comment on a recent Supreme Court case dealing with a South Dakota tax law.

What’s the deal with South Dakota v. Wayfair?

The law requires online retailers who have no physical presence in the state (which applies to most board game publishers) to pay sales tax on sales to South Dakota customers if:

  • They sell over $100,000 of merchandise in South Dakota in a year; or
  • They engage in over 200 transactions in South Dakota in a year.

This law was challenged by Wayfair and other online retailers, who believed that they shouldn’t have to do so. The lack of physical presence in the state meant that they weren’t subject to that state’s tax laws, according to earlier Supreme Court cases.

South Dakota v Wayfair - what does it mean for board game publishers?

So what happened – what did the Court decide?

You’ll have to head over to the Kickstarter Lessons blog, to find out more. Read the whole post, where I weigh in on my thoughts and go a little deeper into the Court’s reasoning for allowing this law to stand, despite legal precedent against it.

You can also read Jamey Stegmaier’s thoughts on it, along with the opinion of Jamey’s tax advisor.

Got an opinion on the case? Leave it in the comments below.

Do you want to know more about taxes for game developers? I’ve got a few great podcast episodes for you. Check them out here:

  1. Discussing indie dev tax issues with Ernest Jones
  2. Taxes and accounting for game devs with Rachel Presser
  3. Taxes and business basics for game devs with Rachel Presser

Board game sales tax issues

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California game lawyer focused on providing end-to-end legal protection and legal services for video game and board game developers, as well as software and mobile app developers.
California game lawyer focused on providing end-to-end legal protection and legal services for video game and board game developers, as well as software and mobile app developers.