2019 Sales Tax Changes: Mid-Year Update

Category : Finance

Read the latest whitepaper on Whitepapers Online titled 2019 Sales Tax Changes: Mid-Year Update There are a lot of headlines in the recent months about economic nexus and marketplace facilitator laws have hogged headlines. There is a lot more to sales tax than just the out of state sale tax. States broaden the sales tax to include new products and services as well as to create new sales tax exemptions. The tax departments are continuously developing new policies and rules to increase or facilitate sales tax collections, along with the regular sales and use tax rate changes.

Economic Nexus: It’s Not Just for Sales Tax.

The economic nexus can be applicable to taxes other than just sales and use tax. There is also income tax. In theory, states do not have the power to tax income that has been derived from interstate commerce. This happens when the solicitations of orders that are taken and filled out is the only business activity in the state, but the states have been pushing against this for decade.

What is SST?

To simplify state sales tax systems, a lot of business leaders and officials spanning over 44 states to reduce the burden that comes with sales and use tax compliance for businesses.

Is Streamlined Sales Tax (SST) the cure to managing remote seller laws?

SST is growing with the burgeoning of remote seller sales tax laws. Earlier, states could not actually impose a sales tax obligation on remote sellers due to the complex nature of sales and use tax laws without simplifying them.

What are marketplace facilitator laws?

Marketplace facilitator laws are used to give responsibility to the marketplace facilitator or provider for collecting and remitting the tax which is due on all sales made through the marketplace platform.

Mushrooming marketplace facilitator sales tax laws

Economic nexus laws are not the only remote sales tax laws that are applicable throughout the nation. There are a lot of states that impose a sales tax collection as well on marketplace facilitators or providers. This happened because many marketplace sales were going undetected, like Amazon. It is possible for many marketplace sellers to qualify for small-seller exceptions that are provided by state economic nexus laws. This means they are not required to collect and remit the tax themselves.

Key Takeaways:

  • There are continuous developments made by tax departments to increase or facilitate sales tax collections
  • Economic nexus can be applicable to taxes other than just sales and use tax
  • Streamlined Sales Tax (SST) was created to simplify the state tax systems
  • Marketplace facilitator laws are created to hold the marketplace facilitator provider responsible for collecting and remitting the tax due on all sales made on the marketplace platform.

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