In a piece about the fight over current sales tax legislation, the New York Times reports: if legislation passes and states require out-of-state retailers to collect sales tax, software solutions, like the one Avalara provides, can “streamline and manage the process” for these businesses.
What’s the deal with online sales tax?
Actually, it’s not just about online sales tax. The Marketplace Fairness Act of 2013, a bill that awaits a vote in the Senate, would give states the authority to make out-of-state businesses that do not have a physical presence in a state collect and file sales tax. This includes any remote retailer, whether they sell via the web, a catalog, or over the phone. In exchange for this authority, states must meet certain tax code requirements. There is also a small seller exemption: businesses who make less than $1 million per year in remote sales are exempt from the requirement.
If the bill passes, what does it mean for businesses?
If you make remote sales into states that have a sales tax, and don’t currently have to collect, you could have to start collecting in some or all of those states. According to opponents of the legislation, most notably eBay, this would be too complicated and expensive for businesses to handle (NYT). After all, there are over 9,000 taxing jurisdiction across the U.S., and keeping track of all the changing rates and rules where you do business is a huge burden.
A solution for businesses
However, as the NYT observes, your business doesn’t have to take on this burden. There are software solutions that “streamline and manage the process” for you. Avalara’s AvaTax is easy and affordable and can automate your sales tax requirements in any state, from calculation, to exemption certificates, to filing.