3 Important Sales Tax Decisions
3 Sales Tax Predictions For 2020

The world of sales tax has changed a lot in the past year. Following the Supreme Court’s Wayfair decision, 2019 was the year most states began requiring businesses to collect and remit sales tax, and then began making marketplace facilitators (such as Amazon or eBay) responsible for collecting and remitting the taxes on sales that came through their marketplaces.

What changes can we expect to see this year? Keep reading for three predictions we believe are just around the corner.

1. Smaller Retailers Will Depend On Marketplaces

As Greg Chapman, SVP of business development at Avalara explains, “We should expect traditional ecommerce providers to start working closely with marketplaces or offering more ‘Amazon-like’ experiences to stay relevant.”

The increase in online shopping coupled with confusing economic nexus laws make it even more appealing for very small businesses up to mid-sized companies to work with online marketplaces. In addition to facilitating sales in a process that’s more streamlined for customers, a lot of states have placed the burden of sales tax collection on the marketplace rather than the seller. This can greatly reduce the cost and risk of doing business online for companies struggling to navigate tricky taxability questions.

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Monika Miles Sales Tax

The phrase of the day is “V-D-A”!  In the state tax world, that refers to Voluntary Disclosure Agreements, and we are working on many of these for our clients lately.  What are they, exactly, and why should your company perhaps be considering them as well?

What is a Voluntary Disclosure Agreement?

Simply put, entering into voluntary disclosure agreements with states is about companies identifying their potential state tax exposure (sales tax, income tax, or both) and coming forward voluntarily to pay any outstanding liabilities before the state identifies the company as part of an audit or other outreach effort.  As states are becoming more aggressive in their pursuit of out-of-state taxpayers, it’s becoming a bit of a game of “Beat the Clock!”

What are the advantages?

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Monika Miles - Online Sales Tax And Nexus

Although the Wayfair online sales tax ruling doesn’t relate specifically to SaaS, states are enacting laws that make it easier to create nexus, which means all companies – including SaaS – need to be more diligent in determining whether they’re subject to taxes in various states.

What exactly do SaaS companies need to know about Wayfair, the online sales tax debate, and how it may affect them?

How Online Sales Tax Legislation Affects SaaS Companies

Law360 does a good job of explaining why SaaS companies especially need to pay attention to the new online sales tax legislation states are enacting.

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