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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.

For, example, I believe that in at least one state the minimum threshold that requires registration is 100 sales into the state one year. So, let assume that some small company located in west somewhere New Jersey makes 100 sales of $1 each into California. According to the new law, it must register and begin filing returns. I think initially one must first file on a monthly basis before it can reduce its periodic filings if sales are not sufficient. So, it has to either itself or hire an outside sales tax compliance firm (Which you all know is not going to cost $100) to prepare and file returns. Then, the next year this company unfortunately has only 89 sales into California. Must it continue to file? What if the next year following it has 92 sales. The same question. Is Nexus in California like Herpes? Once you have it, you can never get rid of it.

So, I urge all companies in all industries to come together through your various business associations and/or the COST organization or the Chamber of Commerce or all of them to fight this movement. Please! Both instate and out of state companies. Together. You cannot let the states do this to you.”

Lloyd Looram, CPA

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