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Out-of-State Tax Collection in USA Re: "South Dakota v. Wayfair" Decision

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I'm very surprised this topic hasn't been opened yet, perhaps it is going on in another forum that I have not seen yet.  On June 21, 2018, the US Supreme Court reversed over a decade of established precedent that allowed sellers to not collect sales tax on out of state transactions.  

Quote

In a 5-4 decision, the Court ruled in favor of South Dakota and overruled Quill Corp. v. North Dakota and National Bellas Hess, Inc. v. Department of Revenue of Ill. The Court concluded that “the physical presence rule of Quill is unsound and incorrect.” This is a big deal, since Quill had been the law of the land since 1992 regarding nexus for remote sellers and National Bellas Hess since 1967! - Sales Tax Institute ("https://www.salestaxinstitute.com/resources/south-dakota-v-wayfair-is-decided-what-does-it-mean-for-you"

For an online only company like ours, this is a small nightmare.  We are now required to collect sales tax and remit it individually to each state if our sales total over 100 or revenue over $100,000 within a calendar year.  This means 46 different tax rates and monthly filings.   Since this change in law came from the court, rather than from new legislation, each state has put out (or is trying to put out) new legislation and guidance for how out of state sellers should deal with that state's respective sales tax.

To make things worse many areas have "local" or "county" based tax rates on top of what their state charges.  There are thousands and thousands of different tax rates throughout the country.

Our sales exceed that threshold in all states except 1 or two, so we are now left struggling with how to deal with this new tax situation. 

My initial response was to simply create the 46 tax zones necessary and remit tax to those 46 states every month.  However, this ignores all local/county tax regulations, too.  I have found a collection of third-party service providers who make sales tax rating tools.  These are pay services (of course, another expense just so that we can pay more money) and would require work to allow their APIs to plug into the oscommerce framework.  I don't know of any add-on or module that can integrate my shop with a third-party tax rate.

I would like to hear from other shop owners who are also struggling to determine the best course of action to comply and perhaps together we can formulate a good way forward.

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Look here:

In July, I wrote to my Congresscritters asking for Congress to take the lead in sorting this out (yeah, right. sigh...). A three point program:

  1. Force the states to come up with a unified sales tax classification system, so a merchant only has to figure out once which tax class something goes in, and not state-by-state.
  2. Make every state publish CSV tables of rates per tax class for either statewide or state+ZIP Code. Everybody knows their state and ZIP. Not everybody knows their county or tax jurisdiction. Leave it to each state to decide how to allocate rates and remittances among the tax jurisdictions a ZIP Code overlaps.
  3. Set up a simple one-form, one-payment tax remittance system covering all states, so that merchants can simply transfer how much tax they collected per class per tax zone to a CSV file, and submit one payment, and they're done for every state.

I would think that state, county, district, and city taxes could be combined into a single number for any ZIP Code. Leave it to the states how they want to distribute it (item 2).


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