Thank the cry babies in south dakota
They were told to do it. It was all a political game. It was known the court would most likely rule in favor of it and South Dakota was just the test case to get to the courts.
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Thank the cry babies in south dakota
Right now it is the Wild West and the horses are loose. It’s going to be insane hard to manage all this.
After the court ruling we are going to have to collect sales tax from every state that has a law requiring the collection which is quite a few. I’d expect all but a few will have one by the end of the year.
while there is software to manage this last time i checked the best one was going to cost $250k a year . Bet they increase that cost now. There are 12,000 state, county and city tax codes to follow, 50 states that can now audit businesses, and a seemingly limitless amount of rules on what is taxable and what isn’t.
They were told to do it. It was all a political game. It was known the court would most likely rule in favor of it and South Dakota was just the test case to get to the courts.
If only it were that simple. Some states tax clothing, others don’t tax food or other items at different rates. So it’s not just the state>country>city you bought it from but also what you bought.
IMO they should exempt business who make less than $10M in revenue a year. That being said both BRS and MD both make more than that and I’m fine with them having to charge sales taxes. Gives smaller sellers a chance.
I think we’ll start seeing exemption laws put in place for smaller businesses.
Even without the new law, BRS and MD both has it coming —- you establish nexus as soon as you go to a trade show out of state (boots on be ground establish nexus). Also, if you sell through fulfillment by amazon you automatically have nexus in 13 states. If you use affiliates - you have nexus in the state they live in as well (this was likely the reason why BRS avoided affiliates - MD has affiliates so they pretty much have nexus everywhere)
Source - I’m a CPA
Why does BRS "has it coming". They are at fault for following the law or because they are not a "smaller business".
You're incorrect. Sales tax is not levied on the business (its collected by the business from the consumer). Sales tax is a consumption tax, and is generally charged on the sale of products from retailers to individual consumers.New Hampshire has no sales tax or income tax, go figure. I live in Massachusetts, but shop in New Hampshire because it is convenient.
From what I have read, a sales tax is a tax levied on the business. The business then passes it onto the consumer. This is why out of state companies don't pay sales tax to the state. If the company has an office in the state, then it is a different story. I never paid tax on Amazon until they set up an office in Boston.
No one owns the internet, especially the government so I think it is total crap that they think they can tax e-commerce.
The sales tax goes to the state the customer is in. It is the customer that is responsible for paying the tax - not the business (until now).Another thing I just thought about, who gets the tax revenue? The state the business is in or the state the customer is in?
Because they were going to tradeshows they were establishing nexus and they have grow quite a bit. MD should have implemented first though because they use affiliates.
A common misconception before this ruling came out was companies though you didn’t have nexus if you only went to tradeshows. Many states had rulings about this before this last big ruling for the Feds. Texas is a good example of this being highly aggressive (if you spend one day in Texas at a tradeshow —- Nexus [emoji29])
That is true and that will kill the WWC and JF of the world and any other small company that has setup a booth at MACNA.
Yup - that’s why I said there should be a exemption for a business making less than $10M in revenue a year.
Taxjar is pretty solid at taking care of it though given you have a modern shopping cart system. Like I said I have worked with folks making around $500K in revenues a year selling on FBA and reporting 13 states with minimal issues.
I actually don't see how this is a major 'programming' problem for a website. I'm charged sales tax on stuff I buy from BRS because I live in MN. I assume that based on my zip code whatever software used on the webpage has a database of tax rates in MN and its automatically calculated (many locations have different sales tax rates in MN). I can't see how adding a tax rate database for the rest of the country would be that difficult. I do see how it would be onerous to prepare sales tax reports for 50 states for a small business... I wonder if state auditors from one state have the jurisdiction to audit a company in another state.
I don't think the problem would be bad if it were just the 50 states. The challenge is that almost every city and county also have their own taxes. And, it isn't always separated by zip code. As an example, my zip code is part inside city limits and part outside. A store outside city limits has a sales tax 1.3% (if I remember right) lower than one inside city limits. Some larger cities may even be spread across more than one county so could have 2 different sales tax rates.I actually don't see how this is a major 'programming' problem for a website. I'm charged sales tax on stuff I buy from BRS because I live in MN. I assume that based on my zip code whatever software used on the webpage has a database of tax rates in MN and its automatically calculated (many locations have different sales tax rates in MN). I can't see how adding a tax rate database for the rest of the country would be that difficult. I do see how it would be onerous to prepare sales tax reports for 50 states for a small business... I wonder if state auditors from one state have the jurisdiction to audit a company in another state.
In my zip code there are 5 different tax rates.
City in county 1
City in county 2
county 1
county 2
Special tax zone