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What You Need To Know About Collecting Sales Tax in 2019 Debbie Longo VP, Client Services PowerPoint Presentation
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What You Need To Know About Collecting Sales Tax in 2019 Debbie Longo VP, Client Services

What You Need To Know About Collecting Sales Tax in 2019 Debbie Longo VP, Client Services

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What You Need To Know About Collecting Sales Tax in 2019 Debbie Longo VP, Client Services

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  1. What You Need To Know About Collecting Sales Tax in 2019Debbie LongoVP, Client Services

  2. Sales Tax for Remote Sellers … in this world nothing can be said to be certain, except death and taxes (Benjamin Franklin, 1789) • 1921 – Virginia – first state to impose a Sales Tax • 1930 – Kentucky • By 1933 – Great Depression – 11 states • By 1940 – 18 more states • Today – 5 states still do no have a sales tax • Alaska, Delaware, Montana, New Hampshire, Oregon

  3. Sales Tax for Remote Sellers • The Sales Tax / Use Tax fight • (1967) National Bellas Hess v. Dept of Rev of IL • a mail order reseller was not required to collect sales tax unless it had some physical contact with the state • Use taxes are still due, but under Bellas Hess they must be collected from and paid by the customer, not the out-of-state seller. • (1992) North Dakota vs. Quill • a state cannot require an out-of-state seller with no physical presence in the state to collect and remit sales taxes on goods the seller ships to consumers in the state

  4. Sales Tax for Remote Sellers • and then came AMAZON!! • Fought for a decade against collecting sales tax where no physical nexus • In 2011 they reversed course

  5. Sales Tax for Remote Sellers • (2010) Colorado passed a law that required out of state vendors to provide information to its citizens regarding their total purchases so that residents could determine their tax liability for the state. • The Direct Marketing Assoication filed a lawsuit -Direct Marketing Ass'n v. Brohl -challenging this new law • Court first decided in favor of the DMA, based on the principal of Quill • Tenth Circuit Appeals Court overturned this – since no tax was being ‘collected’ Quill did not apply

  6. Sales Tax for Remote Sellers • (2015) DMA filed an appeal with the Supreme Court who remanded it back to the Tenth Circuit Appeals Court • Justice Anthony Kennedy’s opinion on the case included • “It is unwise to delay any longer a reconsideration of the court’s holding in Quill,” …A case questionable even when decided, Quill now harms states to a degree far greater than could have been anticipated earlier.” • “When the court decided Quill, mail-order sales in the United States totaled $180 billion …by 2008, e-commerce sales alone totaled $3.16 trillion per year in the United States.”

  7. Sales Tax for Remote Sellers • South Dakota vs. Wayfair (kill-Quill) • on June 21, 2018, the US Supreme Court ruled that states can require sellers to collect and remit sales or use tax on sales delivered to locations within their state regardless of physical presence • 37 States now charge remote sellers • 2 States will begin charging in the near future • See Economic Nexus handout • Much easier for large companies to comply than medium or small companies

  8. Sales Tax for Remote Sellers • Consumers take Sales Tax Calculations for granted • Managing the rates and calculations as a merchant isn’t easy • Of 37 states requiring Remote Seller Sales Tax • 11 have a State Level Tax only • Currently over 10,000 taxing jurisdictions • State Rates, County Rates, City Rates, Zip Rates

  9. Sales Tax for Remote Sellers • Complexities • Zip Codes with multiple counties • 32018 – FL – Duval and St. Johns County • 30075 – GA – Fulton, Cherokee, and Cobb Counties • Some states have a large number of jurisdictions • TEXAS 254 • GEORGIA 159 • KANSAS 105 • NORTH CAROLINA 100

  10. Sales Tax for Remote Sellers • Complexities • CA has 24 different rates (7.25% - 10.25%)

  11. Sales Tax for Remote Sellers • Complexities • GA - Most Zip Codes in a single county have same combined rate, but there are some abnormalities

  12. Sales Tax for Remote Sellers • Streamlined Sales and Use Tax (SSUT) • 2000 - Streamlined Sales Tax Governing Board • Goal - find solutions for the complexity in state sales tax systems that resulted in the U.S. Supreme Court holding that a state may not require a seller that does not have physical presence in the state to collect tax on sales into the state. • They created the SSUTA • Purpose - to simplify and modernize sales and use tax administration in order to substantially reduce the burden of tax compliance

  13. Sales Tax for Remote Sellers • Streamlined Sales and Use Tax • State level administration of sales and use tax collections. • Uniformity in the state and local tax bases. • Uniformity of major tax base definitions. • Central, electronic registration system for all member states. • Simplification of state and local tax rates. • Uniform sourcing rules for all taxable transactions. • Simplified administration of exemptions. • Simplified tax returns. • Simplification of tax remittances. • Protection of consumer privacy.

  14. Sales Tax for Remote Sellers SSUAT Members (23) Arkansas Georgia Indiana Iowa Kansas Kentucky Michigan Minnesota Nebraska Nevada New Jersey North Carolina North Dakota Ohio Oklahoma Rhode Island South Dakota Utah Vermont Washington West Virginia Wisconsin Wyoming

  15. Sales Tax for Remote Sellers • Congressmen are fighting against undue burdens for the small / medium merchants in their states • IL has a Remote Seller State Level Use Tax only (no local taxes) • We expect more states to follow in simplifying Remote Seller taxes

  16. Sales Tax for Remote Sellers CCS – SSRS – Item Sales by State Report

  17. Sales Tax for Remote Sellers CCS – SSRS

  18. Sales Tax for Remote Sellers