1. What You Need To Know About Collecting Sales Tax in 2019 Debbie Longo VP, Client Services

2. Sales Tax for Remote Sellers
… in this world nothing can be said to be certain, except death and taxes (Benjamin Franklin, 1789)
1921 – Virginia – first state to impose a Sales Tax
1930 – Kentucky
By 1933 – Great Depression – 11 states
By 1940 – 18 more states
Today – 5 states still do no have a sales tax
Alaska, Delaware, Montana, New Hampshire, Oregon

3. Sales Tax for Remote Sellers
The Sales Tax / Use Tax fight
(1967) National Bellas Hess v. Dept of Rev of IL
a mail order reseller was not required to collect sales tax unless it had some physical contact with the state
Use taxes are still due, but under Bellas Hess they must be collected from and paid by the customer, not the out-of-state seller.
(1992) North Dakota vs. Quill
a state cannot require an out-of-state seller with no physical presence in the state to collect and remit sales taxes on goods the seller ships to consumers in the state

4. Sales Tax for Remote Sellers
and then came AMAZON!!
Fought for a decade against collecting sales tax where no physical nexus
In 2011 they reversed course

5. Sales Tax for Remote Sellers
(2010) Colorado passed a law that required out of state vendors to provide information to its citizens regarding their total purchases so that residents could determine their tax liability for the state.
The Direct Marketing Assoication filed a lawsuit -Direct Marketing Ass'n v. Brohl -challenging this new law
Court first decided in favor of the DMA, based on the principal of Quill
Tenth Circuit Appeals Court overturned this – since no tax was being ‘collected’ Quill did not apply

6. Sales Tax for Remote Sellers
(2015) DMA filed an appeal with the Supreme Court who remanded it back to the Tenth Circuit Appeals Court
Justice Anthony Kennedy’s opinion on the case included
“It is unwise to delay any longer a reconsideration of the court’s holding in Quill,” …A case questionable even when decided, Quill now harms states to a degree far greater than could have been anticipated earlier.”
“When the court decided Quill, mail-order sales in the United States totaled $180 billion …by 2008, e-commerce sales alone totaled $3.16 trillion per year in the United States.”

7. Sales Tax for Remote Sellers
South Dakota vs. Wayfair (kill-Quill)
on June 21, 2018, the US Supreme Court ruled that states can require sellers to collect and remit sales or use tax on sales delivered to locations within their state regardless of physical presence
37 States now charge remote sellers
2 States will begin charging in the near future
See Economic Nexus handout
Much easier for large companies to comply than medium or small companies

8. Sales Tax for Remote Sellers
Consumers take Sales Tax Calculations for granted
Managing the rates and calculations as a merchant isn’t easy
Of 37 states requiring Remote Seller Sales Tax
11 have a State Level Tax only
Currently over 10,000 taxing jurisdictions
State Rates, County Rates, City Rates, Zip Rates

9. Sales Tax for Remote Sellers
Complexities
Zip Codes with multiple counties
32018 – FL – Duval and St. Johns County
30075 – GA – Fulton, Cherokee, and Cobb Counties
Some states have a large number of jurisdictions
TEXAS
GEORGIA
KANSAS
NORTH CAROLINA

10. Sales Tax for Remote Sellers
Complexities
CA has 24 different rates (7.25% %)

11. Sales Tax for Remote Sellers
Complexities
GA - Most Zip Codes in a single county have same combined rate, but there are some abnormalities

12. Sales Tax for Remote Sellers
Streamlined Sales and Use Tax (SSUT)
Streamlined Sales Tax Governing Board
Goal - find solutions for the complexity in state sales tax systems that resulted in the U.S. Supreme Court holding that a state may not require a seller that does not have physical presence in the state to collect tax on sales into the state.
They created the SSUTA
Purpose - to simplify and modernize sales and use tax administration in order to substantially reduce the burden of tax compliance

13. Sales Tax for Remote Sellers
Streamlined Sales and Use Tax
State level administration of sales and use tax collections.
Uniformity in the state and local tax bases.
Uniformity of major tax base definitions.
Central, electronic registration system for all member states.
Simplification of state and local tax rates.
Uniform sourcing rules for all taxable transactions.
Simplified administration of exemptions.
Simplified tax returns.
Simplification of tax remittances.
Protection of consumer privacy.

14. Sales Tax for Remote Sellers
SSUAT Members (23)
Arkansas Georgia Indiana
Iowa Kansas Kentucky
Michigan Minnesota Nebraska
Nevada New Jersey North Carolina
North Dakota Ohio Oklahoma
Rhode Island South Dakota Utah
Vermont Washington West Virginia
Wisconsin Wyoming

15. Sales Tax for Remote Sellers
Congressmen are fighting against undue burdens for the small / medium merchants in their states
IL has a Remote Seller State Level Use Tax only (no local taxes)
We expect more states to follow in simplifying Remote Seller taxes

16. Sales Tax for Remote Sellers
CCS – SSRS – Item Sales by State Report

17. Sales Tax for Remote Sellers
CCS – SSRS

18. Sales Tax for Remote Sellers