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Tag Archive for Wayfair Decision

3 Important Sales Tax Predictions To Watch For In 2020

MONIKA MILES

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.

3 Sales Tax Predictions For 2020
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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3 Important Sales Tax Predictions To Watch For In 2020

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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What You Need To Know About The Wayfair Decision And How It Affected Sales Tax

MONIKA MILES

Here we are, about 18 months after one of the biggest jolts to the sales tax landscape. On June 21, 2018, state sales tax completely changed when the U.S. Supreme Court established precedent for economic nexus through South Dakota v. Wayfair, Inc.

In the highly anticipated ruling, the Court ruled 5-4 in favor of overturning its 1992 Quill decision, which required sellers to have substantial physical presence before a state could enforce the sales tax collection responsibilities.

Writing for the Court’s majority, Justice Anthony Kennedy indicated, “The Court concludes that the physical presence rule of Quill is unsound and incorrect. The Court’s decisions in Quill Corp v. North Dakota, 504 U.S. 298 (1992) and National Bellas Hess, Inc. v. Department of Revenue of Ill., 386 U.S. 753 (1967), should be, and now are, overruled.”

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Four States With New Economic Nexus Legislation

Monika Miles - 4 More States And Nexus

Following last year’s Wayfair Supreme Court case, which set precedent for states to enact economic nexus provisions, legislatures across the country have defined and implemented new online sales tax laws.

Although many states quickly implemented economic nexus provisions and have already started collecting online sales tax, there are some that have decided to take a little bit of extra time.

Arkansas’ Online Sales Tax Legislation

Here are four states that recently passed online sales tax provisions. Keep reading for the details!

Quick Arkansas Highlights:
  • Passed? Yes
  • Effective date? July 1, 2019
  • Thresholds? 200 separate transactions or sales exceeding $100,000 of tangible personal property, taxable services, digital codes or specified digital products

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The States Are Going Too Far With Wayfair: Commentary From A Recently Retired CPA

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This Very Thoughtful Commentary Was Provided In Yesterday’s Post – We Want To Know What You Think!

“I continue to be greatly disturbed by what is occurring regarding this extremely complex and current economic issue. I understand fully that the US Supreme Court has given approval to the actions being undertaken by states all across this country through its decision concerning Wayfair. But, I believe that the states are going too far. I have dealt with states and sales tax audits and auditors for 50 years. Both in industry and in public accounting. I have represented clients as an expert witness in court cases.
I have said and written this before. I will say it to anyone that will listen. To require companies that have no tangible connection with a state that merely sell into a state on the internet to register then collect then remit then be audited then be assessed for any tax inadvertently not paid plus a penalty and interest for having nothing in the state for which the state provides services to the company is not right. It akin to the oppressed system that existed in England more than 100 years ago.

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Economic Nexus In Wake Of Wayfair Decision

Monika Miles - Economic Nexus In Wake Of Wayfair Decision

In the United States, the sales tax landscape is drastically changing due to the recent U.S. Supreme Court ruling in South Dakota v. Wayfair, Inc. In a previous blog, we talked about how the High Court made a landmark decision in June of 2018 that makes it easier for companies to create nexus in states. It ruled in its monumental decision, that it is constitutional for the State of South Dakota to enact an economic nexus law.

As a result, more states are jumping on the economic nexus bandwagon and enacting economic nexus laws too. States are eager to collect sales tax and, in theory, want to make it easier for companies to pay their taxes. In addition to physical presence, if companies also have economic nexus in a state, that qualifies them to pay sales tax to the state, provided the state has enacted an economic nexus statue.

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More Amnesty In Wake Of Wayfair Decision

Monika Miles, Amnesty In Wake Of Wayfair Decision

There always seems to be an amnesty program going on somewhere. We recently reported on an amnesty program in Texas and other states are jumping on the bandwagon as well. The recent Wayfair Supreme Court decision has shed light on the requirements to collect sales tax and as a by-product more companies are focusing on getting into compliance. States are encouraging this behavior by administering amnesty programs.

When businesses become delinquent on their taxes, they often accrue penalties and interest with the states. During these amnesty programs, states may waive penalties and/or interest. States administer amnesty programs because they want companies doing business in their state to be compliant and in the process collect the revenue!

Current Amnesty Program in Indiana

The Indiana Department of Revenue (DOR) is offering a Voluntary Disclosure Initiative (VDI) for Online Sellers that started on May 2 and runs through December 31, 2018. According to the Department, this special VDI is tailored to meet the unique needs of retailers that have inventory located in third-party Indiana warehouses and sell to Indiana customers- explaining that many of these retailers selling goods to Indiana customers through service providers have both income and sales/use tax obligations in Indiana. It offers out-of-state retailers the opportunity to enter into a voluntary disclosure agreement (VDA) with unique terms, including a limited look-back period and waiver of underlying penalties.

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