A LITTLE MORE THAN A YEAR AGO, the Supreme Court, in the closely divided South Dakota v. Wayfair decision, ruled states can require most online retailers and many other sellers to collect sales tax, upending more than two decades of legal precedent. The decision affects businesses such as software vendors, equipment retailers, information sellers and any other business selling goods or services subject to sales tax. In other words, it reaches just about everyone. Whether you own a business or are a consumer, it impacts you in some manner. You may pay more now for the item purchased or, as a business owner, you are saddled with much more compliance work, needing to file various tax returns in additional states.
The 5–4 vote overturned the 1992 Supreme Court ruling in Quill Corporation v. North Dakota and eliminated the requirement that businesses be physically present in a state before their sales can be taxed, granting states the ability to collect taxes from out-of-state internet retailers. In 1992 Amazon founder Jeff Bezos was still working on Wall Street. In that year mail order sales totaled $180 million, quite a bit less than the $453 billion estimated in 2017 e-commerce retail sales. Citing reports Amazon surpassed Wal-Mart as the nation’s leading retailer, the court stated that when it decided Quill, “the court could not have envisioned a world in which the world’s largest retailer would be a remote seller.”
The case centered around a South Dakota law which requires remote sellers with more than 200 annual transactions or $100,000 in sales in South Dakota to collect the state’s sales tax. The court felt the law did not pose an undue burden on interstate commerce because it has a concise revenue or transaction threshold, is not retroactive, and the state has a simplified tax system.
One year later there is still confusion, and states and even cities are passing rules on the subject. Business owners should speak with their advisors and confirm they are collecting the required taxes and filing the correct tax returns. As a business grows or increases transactions in a certain city or state, it may exceed a threshold that will mandate it to file, collect or pay taxes.
As it was only decided by one vote, it seems this decision wasn’t an easy one and people can interpret it differently. Things may change again in the future, so stay tuned. Tax authorities are always looking to increase their tax base, and they have ways of finding those not in compliance. It is in your best interest to follow the law, even if it is frustrating and costly.
The content of this article is for informational purposes only. It is not intended to be a substitute for professional financial advice. Always seek the expertise of a certified financial advisor or other qualified provider with any questions you may have regarding personal finance, investment and money-related issues
WhereverFamily, a web publication, a trusted travel source for the modern family and part of the FXExpress Publications, Inc., family of publications, which includes Global Traveler and trazeetravel.com, announces the winners of its Wherever Awards for the fourth year.
The biggest names in the Middle East sporting community will gather for the Sports Industry Awards as the event returns for its eighth edition. SPIA recognizes the achievements of individuals, organizations, facilities and campaigns that contributed to the development of sport in the region.
Trazee Travel, a web publication and part of the FXExpress Publications, Inc., family of publications, which includes Global Traveler and whereverfamily.com, announces the annual winners of The Trazees. This is the seventh year for the web publication’s awards.
You probably didn’t know you needed to visit the Dominican Republic until you learned about the new, beautiful, modern, all-inclusive resort in Punta Cana.
With more companies around the world becoming more environmentally friendly, American Airlines recently announced it committed to set a science-based target for reducing greenhouse gas emissions. This move will sharpen the company’s strategy for reaching net-zero emissions by 2050 and aligns its path with the global imperative of limiting temperature rise to well below 2 degrees Celsius.
Baros Maldives, situated on one of the only natural private islands in the Maldives, created a three-day detox program for guests. On day one, guests enjoy a scrub and detox massage, with day two including a private yoga session and full-body detox wrap. Day three brings a detox bath followed by a lymphatic drainage massage.
The Sports Industry Awards returned with a bang last night as 200 guests packed the W Hotel Great Ball Room for the gala ceremony.