New Sales Tax Rules

[MikeH]

I'm posting this in the "business" section, and, hopefully we can keep opinions on taxes, etc., out of it so Oren doesn't need to lock it. :-)

For those of you that need to collect sales tax:

From what I'm reading in the Tax forums that I subscribe to, and the Wall Street Journal, and other sources, here's what seem to be the new rules. I make no guarantees, and I will post corrections and updates as I see them. If you have better info, please post.

• Not being said, but the old rules on nexus must still apply. If you have employees, operations, etc. in a state, you must collect sales tax for that state.
• The Justices spoke very favorably of South Dakota's law (which is the law that was challenged & upheld.) Many people think that something close to South Dakota's law will become the standard. North Dakota passed a law identical (?) to their neighboring state, effective the day after the Supreme Court ruling was issued. So, that's today.
• The South Dakota law says you must collect sales tax if either of the following 2 events happen (I'm assuming this is an annual test... I do not know what happens if you pass the test for a while, then drop below the limits.):
• Sales into South Dakota exceed $100,000, or,
• You have more than 200 shipments into South Dakota.

• There are 16 states with laws similar to South Dakota's. If I find a list, I will post it here. Many states will need to pass enabling legislation before it becomes effective in their state.

If you PM me with questions, I will most likely respond to them here.

[Tin Can]

Just got an email from eNay begging for help...

[MikeH]

One thing I forgot to mention: South Dakota's law was specifically not retroactive, in that it did not require new registrants to go back and collect on transactions prior to the law. I have no idea whether the effective date of this law is when it was passed, or yesterday.

[Alan Klein]

Congress will step in with legislation. The Constitution charges them with regulating interstate commerce. Let's hope they do their job.

[Sal Santamaura]

...hopefully we can keep opinions on taxes, etc., out of it so Oren doesn't need to lock it...

To quote my favorite observed bumper sticker, "You'll feel much better when you give up hope." It only lasted through post #3. Better luck next time.

[neil poulsen]

What happens with states that do not collect any sales taxes? (e.g. Oregon)

[j.e.simmons]

Some states, such as Florida, dont have any such small business exemption. They also make compliance difficult and time consuming. I know because I once collected and paid sales tax in that state. First you have to get a sales tax number. Then you have to file a return (monthly or quarterly depending on the business) whether you sold anything or not. If you fail to file, you are fined.

The state sales tax laws are not set up for the convenience of the seller, and I see no reason the states would change things for people like me who sell w few prints on the Internet. I certainly don’t make enough to hire an accountant who could be sure I complied with all the different state regulations.

[Drew Bedo]

I am experiencing consternation: The commerce clause of the constitution requires congress to regulate inter-state commerce. I don't see how North or South Dakota has any business trying to regulate internet commerce from a location outside their respective states. . . .yet SCOTUS says they can. Seems like things just get more complicated every time you turn around.

How can someone attempting to moperate in good faith figure out the appropriatye tax to collect for every jurisdiction? Here at home, If I buy something at one convenience store in the country, only state tax applies. However, if I go into town there is both a state and local sales tax . . .and if I go into the city, they add a Metro Transit increment to be collected as sales tax. This decision may only affect state sales taxes just now, but just wait till some little speed-trap village somewhere decides they can collect something from every on-line transaction that happens out in their county.


Whew!...I'm done just now. Hope that last paragraph isnot considered opinion.

Moot point for me anyway: I have never done that volume of business anywhere. Not sure if that's good or bad.

[Leigh]

• The South Dakota law says you must collect sales tax if either of the following 2 events happen (I'm assuming this is an annual test... I do not know what happens if you pass the test for a while, then drop below the limits.):
• Sales into South Dakota exceed $100,000, or,
• You have more than 200 shipments into South Dakota.

One obvious problem is some dealers will not know until year's end whether or not they're over the limit.
But states commonly(?) collect sales tax quarterly.

So if you end up over the limit, will you be penalized for not filing?

- Leigh

[Tin Can]

Ignorance of a law is not an excuse.