Is it true that the Supreme Court ruled that we have to start charging state sales tax for online sales for all 50 states starting October first?
No, the Supreme Court only said states can start collecting Sales Tax for online sales. Most states have not figured out what they are going to do if anything about it.
No - But within 2 years this will no longer be the case
You will never be required to collect for all 50 states.
In the first place at least 5 states do not have sales tax.
It is five states that do not have sales tax.
No… if you sell on Amazon the buyers are AMAZON’S customers not ours. That is why Amazon will collect the taxes as they are mandated… everyone needs to just calm down… Amazon is already collecting taxes in states with mandates…
As I understand, individual states will collect only if you have 200 transactions or 100,000 in that particular state in sales for you to have to file. Each state will set their own unique threshold tho. Not counting WA and PA which automatically take out already. Idk, who knows
Nope unless you are registered on every state. With the last Supreme Court decision, it will be soon when all states will do what WA, OR, PA and SD do now.
Are you saying that buyers must file taxes in multiple states if their sales in that state are high enough? That would get tricky!
No, dont believe rumors and gossip.
Unfortunately that might be the case soon but not exactly on Oct 1st. Some states have new laws going into effect on Oct 1st.
Even for a state like WA, u still have to file an annual return with their DOR even if Amazon collects and remits sales tax for u. If u cross the threshold, then u owe them taxes from sales on other channels which will become apparent when u file with DOR. But to file with DOR u will have to register with WA tax. Doing so wud mean u r on the hook for .45% (somethign in the ballpark) in B&O taxes as well… (which u can offset in ur own state income taxes)
For anyone doing volume on this site and elsewhere, it might not make sense to wait for congress to act!
No, but I think it’s coming. I also think the few states that currently don’t have a sales tax will see what is going on and want their share of the pie.
As far as Amazon…this explains what is happening now. https://sellercentral.amazon.com/gp/help/7VYHGJ8ZT2M58CP
You can research more about it online. But don’t panic and sign up for any service or start applying to each state for a license just yet. I’m guessing and hoping that Amazon will take on the job.
Hopefully Washington…as in DC…will come up with something that will “standardize” it all…but there are so many things on the list of things they need to do but haven’t…I’m not holding my breath.
so deduct the 5 - with that ruling i dont see how any state will let this gold mine flow away…
For now on Amazon we don’t charge tax, but we have a second business that sells online on our own site and what we were told by our accountant is that we needed to be charging sales tax. The tax however is based on our location, so in our case we charge our state sales tax no matter what state we are selling to. The law our accountant showed us says that we charge for the state our “primary hub” is located in.
How about deducting the 5 or so states that Amazon is now collecting and handling the tax themselves?
I went through the hearing in congress after the supreme court ruling and here is the bad news and some good news:
As a rule, we are no longer protected from collecting sales tax if you are an out of state seller. This applies to both internet and non-internet sales. Basically the physical presence (Nexus) doctrine has been thrown out of the window.
States are scrambling to figure out who is big enough in their eyes to collect sales tax from. They are all acting individually at the moment. There are organizations who are working to get them agree to a common threshold.
Congressional committee could not agree to pass any legislation at the moment to prevent it from happenning or place a moratorium temporarily.
Some states are trying to collect the sales tax retroactively.
Some organizations fear that once sellers have paid sales tax, they may be asked to pay income tax in that state as well.
Although Amazon can collect sales tax on our behalf, however we are still responsible to file it ourselves. What a nightmare! This is a separate court battle whether Amazon should file or the sellers. I haven’t followed it in a few months so don’t know what the status is.
Finally some good news although little:
- Some states like New Hampshire are legislating that if a seller is based in their state and they are being sued by another state for not paying sales tax, the legal battle has to take place in the home state.
So everyone please start calling your congressmen and senators to pass a federal legislation for prevent sales tax collection from small business sellers. Also the marketplace needs to file the sales tax and not the sellers. I believe the threshold should be 3 Million in sales. Obviously not everyone will agree but we have to start somewhere.
Your accountant is incorrect. Please do your own research. You have to pay sales tax for the jurisdiction you sell into.
Maybe you should look for a new accountant.
On Amazon, there is no threshold. I sell $200 to $500 (good month!) a month on AZ, to all states not each state, as a “hobby” seller. AZ collects taxes for all authorized tax collecting states, no matter how small my sales amount is. Therefore, AZ does not recognize the seller thresholds set by the state. Or AZ uses total sales on the AZ site to that state as they believe the customer is theirs.