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The Supreme Court ruled Thursday that states can compel retailers to collect sales taxes even if they don't have a physical presence in the state.
We've been selling online for almost 20 years. We collect and pay taxes for our state quarterly, as required by law.
Collecting sales taxes for every state is a simple switch on our websites. However, registering with 49 more states and filing annually, quarterly or monthly is a nightmare I can't imagine. That could be 50-600 returns a year. My own state requires that I break it down by county, which is a very time consuming task.
Better solutions?
The sales tax goes to the state of the seller, not the buyers. We only have to file one return and it would help the infrastructure where the business is being run. States would have more incentives to support small businesses.
Or, we email a total to each customer at the end of the year and let them know how much to claim in out of state purchases on their personal tax returns.
Isn't it going to be collected and paid by the online website that the transaction goes thru? Maybe the payment portal? Instead of the seller. I sure hope so if it's anywhere near as messy and complicated as you say.
Isn't it going to be collected and paid by the online website that the transaction goes thru? Maybe the payment portal? Instead of the seller. I sure hope so if it's anywhere near as messy and complicated as you say.
We have our own websites and don't sell on the big sites like Amazon. And just think, 49 more places that can audit sellers.
My own state requires that I break it down by county, which is a very time consuming task.
I would not be operating a business in that State nor delivering to it if they think they can make me do some crap like that. They've gotta be out of their damn minds
Isn't it going to be collected and paid by the online website that the transaction goes thru? Maybe the payment portal? Instead of the seller. I sure hope so if it's anywhere near as messy and complicated as you say.
If it is - Only the big boys will survive - States will be shooting themselves in the foot by creating monopolies which they supposedly hate.
Isn't it going to be collected and paid by the online website that the transaction goes thru? Maybe the payment portal? Instead of the seller. I sure hope so if it's anywhere near as messy and complicated as you say.
While that may be possible your making the assumption that companies are goign to want to take on the risk and liability of doing this on your behalf, as well as assuming they are going to do it for free.
I see this attitude among alot of people, oh not a big deal someone else will handle it for me. While that's a possibility Entrepreners are supposed to solve their own problems and find solutions to their own problems so I personally view this as a headache and don't expect someone else to solve this for me, though it would be nice if someone did
Got a call Thursday from one of our CA wholesale suppliers. They are being audited by the FTB. Most of our orders are shipped to us in another state, but occasionally we will have them drop ship to our CA customers.
They were instructed that they needed to charge sales tax on wholesale orders from their resellers that are being drop shipped to any CA address, or we could get a permit with CA so we could collect/pay the tax.
I honestly don't think this is a law. For example:
CA customer buys $100 worth of merchandise from us and our website doesn't charge them tax because they're out of state.
We buy the merchandise from our wholesaler for $60 and have them drop ship because it's better for the customer, they get the items faster. They have our reseller license on file, but FTB wants them to charge us tax. We aren't the retail customer, they don't know the retail price because WE are the seller, not the factory we buy from. They are reaching here. If this is true, we will have to change how we ship and the customer will have worse service.
One of our other suppliers was audited by FTB in 1996. We also had them drop ship to our customers. FTB required us to send them all our CA customer invoices to prove that we were the seller. We did, everything was done correctly and they still drop ship for us.
The California BOE is merciless. They use the full power of their guilty until proven innocent money grabs. We've had to stop paying vendors because the BOE is after them and wants all money going to them. One auditor even claimed he knew our vendor wasn't the target, but he knew the owner was the brother of their true target.
As for the ruling, yes, you can now get economic nexus. Avalera (which just went public) will basically become the only option for the big companies. The smaller ones have a couple of choices, but it's not something small businesses can foreseeably comply with on their own. All of the home rule states will have this as well. For example, selling true SaaS is not taxable in Illinois, but Chicago has made their own special tax for it. Colorado doesn't tax this, but 70+ home rule special tax jurisdictions do.
It makes sense, as it is an unfair to local providers, but the lack of consistency means across the nation is a real impediment to interstate commerce.
It's not just interstate either. Now foreign sellers will have to register as well.
The States are broke, the towns are broke....and they've just found a whole new money pit.
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