A few states have found another way to complicate sales tax compliance for vendors. The motives of politicians in Tennessee and Virginia are likely pure, but their technique of carving out sales tax exemptions for certain products presents challenges to suppliers, vendors and regulators.
In the Old Dominion, the state is exempting emergency preparedness-type things this week. Yeah, it is Hurricane Preparedness Sales Tax Holiday week again! Nothing like spending the first official weekend of the summer preparing for devastation, death and disease!
Listen, we are all for emergency preparedness, but sales tax exemptions? Why not public service announcements, free bottled water or louder hurricane sirens?
We shouldn’t be surprised that politicians love these holidays so much given their extreme infatuation with sales taxes in the first place (and honestly, we don’t mind…)! And in cases like this, it is hard to argue with an incentive for people to take care of their emergency kit needs. However, the sales tax holiday presents challenges to Virginia vendors.
The identification of what is taxable, rules about shipments and out-of-stocks, figuring out the cap, and mapping to ERPs will be only a few of the challenges presented to VA vendors by the holiday.
In Tennessee, the focus is on natural devastation that has already occurred. This program is still in the ‘sausage-making’ process, but it looks like a sales tax holiday for building materials has support in both houses of the Volunteer state.