New Legislation is Impacting E-Commerce Tax Collection
By: Lindsay Sisk, Gable Tax Group
Things are getting real out there people, and what I mean by that is states are taking it upon themselves to start passing laws in order to collect sales tax on internet sales, even if the company has no physical presence.
Currently if you are an online retailer but have no physical presence in a jurisdiction you are not required to collect sales tax, instead the buyer is supposed to self-remit on their tax returns, which unfortunately for most jurisdictions, never happens. In a few of my prior blog posts I explained that Amazon is now collecting sales tax everywhere, and the US Government is also trying to pass a bill to require online retailers to collect tax, which I liked to call T-Day, however, states are now passing their own laws to start the collection process.
As of July 1, 2017, Indiana and Massachusetts will now require online retailers to register and collect tax. There are a few stipulations. For instance, Indiana does not require the online retailer to register or collect until they pass a $100,000 sales threshold. Massachusetts has gone one step further and set the threshold at $500,000 of sales.
If you’re wondering on how they are accomplishing this, Massachusetts is claiming internet cookies are giving you physical presence in the jurisdiction. However, people are fighting this theory since it poses the question, who owns the internet cookies? Even with the questions up in the air, expect this to be a continuing trend throughout the US. These are just the first of jurisdictions to spearhead this goal, jurisdictions want their tax revenue, and they’re going to keep trying to change the law until its accomplished.
Are you an online retailer and need sales tax assistance? Let us help you! It’s what we do best. Call us for a Free Consultation at 888.872.6579 or email us at Info@Gable.Tax.
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