With $13,000,000,000+ up for grabs in potential revenue, many state legislatures are revisiting their sales tax laws. For example, the Dakotas aren’t usually in the national limelight. But with taxation for online sales at out-of-state locations, these two states have played an active role.
In 1992, Quill Corp. v. North Dakota concluded with a Supreme Court ruling that essentially says a business must have a physical presence in the state before businesses could be required to collect and remit sales tax. Now in 2018, South Dakota v. Wayfair, Inc. is coming before that Court. This case is a challenge to South Dakota’s 2016 law on tax nexus. The state legislature established a new tax collection responsibility on remote businesses that make 200 transactions or more than $100,000 in sales. Gail Cole breaks down these cases and their potential impact for aACE integration partner Avalara.
If the Supreme Court rules in favor of South Dakota, it would set a precedent enabling every state in the nation to force businesses to collect sales tax on every sale they make across the nation. But even if the Court doesn’t make that decision, it’s a real possibility that Congress could establish a nation-wide sales tax obligation. And even if a national solution doesn’t come about, more and more states are individually pushing to boost their budgets with this kind of legislation.
How would this impact your organization?
The exact details and arrangements are all speculation at this point. But savvy business owners understand the value of preparing ahead of time. What changes would you have to make in order to handle sales tax collection in all states? How would you keep track of 50-states worth of taxation percentages and reporting timeframes?
Now is a good time to consider cost- and time-effective solutions for the increasing complexity of sales tax compliance. Preparations now can help you ensure that you can keep providing the best service for your customers and continue to minimize audit risks. AvaTax provides sales tax automation that is efficient, scalable, and seamless.
And it integrates smoothly with aACE 5.
“I am very impressed with the base product that the aACE team has created. From a production and an accounting standpoint, I could not ask for a more comprehensive solution. And, as it is FM based, the customization possibilities are limitless, which means we will never have to alter the way we do business to accommodate our systems — instead, our systems will be able to change to accommodate our needs as they develop.” ~ Jasmine Crandall, Midwest Custom Bottling LLC.