UPDATED_Sales-Tax-Nexus-Legislation-2016-so-far-2

2016 Fiscal New Year – Sales Tax Change on July 1.

46 states start their fiscal year on July 1. With that comes a whole new set of sales tax laws to follow.

What do you need to know about the big changes taking effect and the proposed changes that could impact your business if and when they’re enacted as law

The following is by no means exhaustive, but highlights the biggest trends in these areas:

• Marketplace Fairness Act (MFA) or “internet sales tax”

• Nexus laws at the state level • Local sales and use tax rates

• Internet sales tax changes

• Sales tax holidays

• Fuel tax changes

• Other miscellaneous taxability news and events

2016 nexus laws at the state level While Congress debates over the MFA and other proposed legislation, state governments are focusing on nexus rules that will impact many remote sellers. MultiState Insider highlights many of the states that have changed their nexus rules in 2016.

Alabama

Allows remote sellers to continue participating in the Simplified Seller Remittance Program even if they establish physical nexus within the state or if the federal government removes current sales tax limitations.

 Illinois

Shell bill titled “Creates the Marketplace Fairness Act.”

Kansas

Requires the state to inform individuals of their obligation to remit the sales tax on remote purchases.

Louisiana

» Presumes sales tax nexus if a seller uses an in-state affiliate to advertise, promote, facilitate or refer sales or to facilitate the delivery of sales.

» Requires remote sellers to provide notice to instate purchasers that the Louisiana sales tax may be due at the time of purchase..

Massachusetts

» Authorizes state taxing authorities to collect sales tax from remote sellers and reduce the sales tax rate to 5.75 percent.

» Authorizes state taxing authorities to collect sales tax from remote sellers in anticipation of federal action on this subject.

» Changes the definition of “engaged in business in the commonwealth” to include having an in-state intermediary perform certain services on the vendor’s behalf, including: regularly soliciting sales within the state, maintaining storage or distribution facilities, or facilitating the deliver or repair of sold property.

» Authorizes state taxing authorities to collect sales tax from remote sellers in anticipation of federal action on this subject.

Mississippi

Revises the definition of “retailer,” “retail sale,” and “doing business” for the purposes of the sales tax.

Nebraska

Presumes sales tax nexus either if any one of several criteria are met, including: a seller using an in-state affiliate to facilitate their operations, utilizing an in-state marketplace provider, or having cumulative sales into the state in excess of $10,000 in the previous year.

Ohio

Presumes sales tax nexus if a seller utilizes an in-state affiliate to advertise, promote, facilitate or refer sales or to facilitate the delivery of sales.

Oklahoma

Presumes sales tax nexus if a seller utilizes an in-state affiliate to advertise, promote, facilitate or refer sales or to facilitate the delivery of sales. Specifically requires all remotes sellers to collect and remit the state sales tax if they have in-state gross annual receipts in the state in excess of $1 million.

Rhode Island

» Changes the definition of “retailer” to specify that referring customers to a retailer only through a link on a website does not constitute nexus for purposes of the sales tax.

» Presumes sales tax nexus either if any one of several criteria are met, including: a seller using an in-state affiliate to facilitate their operations, utilizing an in-state marketplace provider, or having cumulative sales into the state in excess of $10,000 in the previous year.

South Dakota

Stipulates that an out-of-state seller has nexus with the state for sales tax purposes if their gross revenue from sales into the state exceeds $100,000 in the previous year or if they engaged in 200 or more separate transactions.

Utah

» Presumes sales tax nexus if a seller utilizes an in-state affiliate to advertise, promote, facilitate or refer sales or to facilitate the delivery of sales.

» Requires the owner of every in-state selling platform to file an annual report with the state of each seller who uses the platform, but does not collect the sales tax.

» Creates a rebuttable presumption that a seller of goods or services has nexus if they have in-state affiliates who facilitate the delivery, installation, assembly, maintenance of their sales; if the affiliate shares management, business system, or employees with the seller; of if the affiliate and the seller share intercompany transactions.

 Washington

» Repeals the nonresident sales and use tax exemption.

» Prohibits the state from considering the attendance at a single in-state trade convention per year sufficient to establish nexus with the state.

Source: MultiState Insider.

For more info and to view the source: https://www.multistate. com/insider/2016/02/sales-tax-nexus-legislation-is-already-a-hot-topic-in-state-legislatures-this-year/

Will 2016 finally be the year for Marketplace Fairness Act (MFA) or “internet sales tax”?

When news regarding “internet sales tax” broke in May 2013, many thought the issue would be decided by the end of that year: either the federal government would grant states the authority to tax sales made by certain remote sellers, or legislators would reject the idea and the case would be closed. Instead, 2013 closed with no action — MFA 2013 never saw the light of day in the House. 2014 came and went without any real action on the issue at the federal level.

Three new pieces of remote sales tax legislation were passed around Washington at the start of 2015 (Marketplace Fairness Act of 2015, Online Sales Simplification Act, Remote Transactions Parity Act), but they never went anywhere. In the absence of a federal solution to an issue that has been draining sales tax revenue from states, states are creating remote sales tax legislation of their own.

If federal legislators do not deal with this issue, the United States Supreme Court could take it on.

 

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Mai Truong

I am passionate about helping companies create cultures that support and initiate Sustainability Development Goals for better living for the next future generation.

I provide Pragmatic Advice and Consultancy services to entrepreneurs and startups.
I have 26 years Professional experience in International Business Development, Market Research, Implementation Network Distribution for new Product in the new market. Mai is an Entrepreneur for over 18 years and wearing many hats from CEO/Founder/Sustainable Brands Consultant at Brand Building Consulting to contribute to the society as Pro Bono, Account Director at Taproot Foundation Organization for Non Profit Organization around the globe to focus attention on the pro bono movements, Member of Beverly Hills Chamber of Commerce, Practitioner and Member at Urban Manufacturing Ecosystem Los Angeles County.

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