Supreme Court Ruling Opens Door to US Interstate Ecommerce Sales Tax
The US Supreme Court ruled in June 2018 that each state can now require sales tax to be collected on internet sales. Ecommerce store owners may now have to collect sales tax from out of state buyers and remit them to individual state treasuries.
If you have an ecommerce store, you need to be aware of which states have enacted laws requiring the collection of sales tax by online sellers and how those laws affect you.
Ecommerce Retailers Need to Think About Where They Sell
Each state will have its own set of rules. For instance
- In California, effective April 1, 2019, requires collection of sales tax if your sales exceed $100,000, or your have 200 or more California transactions
- Washingston state has different requirements depending on the $ amount of sales and number of transactions as of October 1, 2018
So far, 26 states have enacted what they are calling “remote seller” sales tax laws that are already in effect, Alabama, California, Colorado, Connecticut, Georgia, Hawaii, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Michigan, Minnesota, Mississippi, Nebraska, New Jersey, North Carolina, North Dakota, Oklahoma, South Dakota, Tennessee, Washington, Wisconsin, Vermont, and Utah. If you are selling on the Internet to these states you may have to collect and pay sales tax as well as registering with each state’s taxing authority. The date on which a remote seller must start collecting sales tax varies from state to state.
Maryland, Nevada, South Carolina, Wyoming, Massachusetts, Ohio, South Dakota have laws pending or in litigation.
As you may have guessed, this situation is in flux, with states scrambling to adopt policies that will comply with the Supreme Court ruling. These tax rules and laws can change at any time.
This is a bookkeeping nightmare for small businesses who would have to deal with complying with different rules in each state. The added difficulty and expense may drive some small ecommerce businesses out of business.
About A Street Web Design
Web design is our full time job. Since 2002, we’ve been designing websites that work for business. That means getting found. Persuading people to call you. Making sales. If you are looking for someone who can help you get a website that works for your business within your budget, call A Street Web Design – 541-582-0597.