Sales Tax on Shop[smith Orders

[dickg1]

As I understand the bill that has passed in the Senate, on-line sales by businesses that gross one million or less per year are exempted from collecting and reporting sales taxes.
Dick

[frank81]

[quote="JPG40504"]As Heath just said, more bureaucracy!

Seller has to report to 50 states plus all the locals!:mad:

I do hope Uncle Sam will act as a 'clearing house' and the states do the same for the locals.

And done in a simple efficient manner!!!!!:) How's that for an oxymoron?]

I already have to remit sales tax at work to every entity we have a dealership and sell parts through. If we didn't have a manufacturer/dealer relationship and were direct sales only (like S/S) we wouldn't have to.

All I'm required to do is report parts sales in each taxing division - meaning I may report total sales for all of Arkansas but Missouri has three teirs of sales tax so I have to report by city or county.

It's not very complicated to administer, heck I just do mine in Excel. It takes me about 20 minutes.

[JPG]

I already have to remit sales tax at work to every entity we have a dealership and sell parts through. If we didn't have a manufacturer/dealer relationship and were direct sales only (like S/S) we wouldn't have to.

All I'm required to do is report parts sales in each taxing division - meaning I may report total sales for all of Arkansas but Missouri has three teirs of sales tax so I have to report by city or county.

It's not very complicated to administer, heck I just do mine in Excel. It takes me about 20 minutes.

So you only sell to MO and AR? Add 48 more! Some with multi tiers! Annnd a much much larger 'customer base'.

That would be a humongous spread sheet! You would need a GPS to find the 'correct' cell!:D

[frank81]

So you only sell to MO and AR? Add 48 more! Some with multi tiers! Annnd a much much larger 'customer base'.

That would be a humongous spread sheet! You would need a GPS to find the 'correct' cell!:D

That was an example. I sell in all states. Annual sales are over $100 million.

[JPG]

That was an example. I sell in all states. Annual sales are over $100 million.

Dealer count? I assume you will already have 'local' info for all dealers. I also assume a sheet for each state. That would make it manageable.

Orrr does each dealer have a separate entry 'line' with each state/local totals calculated.

20 min x 50 states = ??? or 20 min for the USA?

[heathicus]

Sales tax has been based on where the transaction physically occurs, regardless of the seller's address.

In Quill Corp. v. North Dakota, the Supreme Court ruled that a business must have a physical presence in a state for that state to require it to collect sales taxes. However, the court explicitly stated that Congress can overrule the decision through legislation.
http://en.wikipedia.org/wiki/Quill_Corp ... rth_Dakota

The Quill Corps. v. North Dakota ruling affirmed that, under current law, a State can not make a business with no physical presence in their state (advertising doesn't count) collect sales tax for that state. Where or how the transaction occurs doesn't matter. Where the business has a physical presence is what matters. That's the law. Congress, with the support of major retailers (who already have major online sales or feel their overpriced brick and mortar stores are losing out to cheaper online sales) like Walmart, Amazon, Buy.com, Best Buy, Barnes And Noble, Home Depot, JC Penny, PetSmart, Sears, etc., are trying to change the law.

This law hurts individuals and small businesses, and protects large corporations against competition from cheaper online retailers.

As I understand the bill that has passed in the Senate, on-line sales by businesses that gross one million or less per year are exempted from collecting and reporting sales taxes.
Dick

The exemption is not for a million or less per year gross, but a million or less in "remote sales." So that's just for the portion of sales to customers in states where you have no physical presence. Sounds like a nice exemption and a pretty substantial one. Certainly helps to sell the law as fair to small business. But how long until it is reduced or eliminated when a few states decide they need some more money?

[frank81]

Dealer count? I assume you will already have 'local' info for all dealers. I also assume a sheet for each state. That would make it manageable.

Orrr does each dealer have a separate entry 'line' with each state/local totals calculated.

20 min x 50 states = ??? or 20 min for the USA?

20 min for the whole USA. It's not necessarily the dealers locations, its shipping address. Could be the dealer, could be an indpendent shop doing repairs, and could be Joe Six pack's house if he walked in the dealer and ordered it for home delivery.

If someone were to program a utility for websites it would be a very quick and simple thing. It's no different than calculating shipping for any business that doesn't use flat rate boxes.

[beeg]

But how long until it is reduced or eliminated when a few states decide they need some more money?

My view on that is States NEEDS to learn how to HANDLE they money they get now.

So small business that make over a million. Will HAVE to track the "remote sales", after a certain point.

[frank81]

My view on that is States NEEDS to learn how to HANDLE they money they get now.

So small business that make over a million. Will HAVE to track the "remote sales", after a certain point.

I think Missouri runs a pretty tight ship, but then again I moved from the East Coast where its blatantly wasteful.

All small businesses already have to track remote sales. They have to be able to separate them in their sales register should they ever get audit on sales tax because they are only paying on the in-store portion (and in-state remote sales). Total sales still have to be reported when the file income taxes.

From a business perspective, the 1099 reporting changes were a much larger burden than this sales tax issue and the masses didn't squeal anything like this. So I have to believe people simply don't want to pay sales tax and are using business regulation as a scapegoat.

[forrestb]

Things change of course but right now
1) states must agree to participate. So if MO chooses not to participate no one would have to collect taxes for them.
2) States that do participate have to provide businesses with the software to keep track of what sales tax to charge for each local entity (9,500 entities with all kinds of different rules on what is to be taxed).
3) States would have to provide a single place in the state for the collected taxes to be sent. The state would then have to get the right amount of tax to the right entity.

All in all a bureaucratic nightmare that will raise the cost of states, many of which are facing short revenue as it is. I seriously doubt that Congress is going to repay the states for what it costs them to do this.

But, hey, unfunded mandates are common already.

Forrest