June 2022 Roundup: Tax laws you need to know

While you focus on your business, we stay on top of legislative and policy changes that can affect your tax compliance.

Nuts and bolts

Change happens. A host of tax and compliance changes take effect July 1, 2022. These include new sales tax exemptions, new sales tax rates, and new registration requirements. Learn more.

Charging for convenience. Many businesses add a surcharge on credit card transactions to help offset the cost of processing credit card payments. Some states limit or prohibit this practice. Others tax credit card surcharges. Learn more.

Money in the pocket. Diapers are exempt from Maryland sales tax starting July 1, 2022, as are nicotine patches, toothbrushes, and a variety of other products. Learn more.

More, more, more. More states are imposing more fees and taxes on more activities and products — including some that might surprise you. Learn more.

More questions than answers. Businesses worldwide are preparing to collect Colorado’s new retail delivery fee, which takes effect July 1, 2022. To help them understand their new obligations, the Colorado Department of Revenue fielded questions during a recent stakeholder meeting. Learn more.

No surprises here. The Senate Committee on Finance and a recent survey of businesses have reached the same conclusion: Small businesses are finding it challenging and costly to comply with online sales tax laws resulting from the U.S. Supreme Court decision in South Dakota v. Wayfair, Inc. Learn more.

Omnichannel marketing creates operational complexity (say that five times fast). All companies that sell physical goods must manage inventory against orders. The more channels you sell through, the more complex that job becomes. Learn more.

Physical presence in the Cyber Age. Massachusetts continues to fight for the right to enforce a cookie nexus law that was in effect before the Bay State adopted economic nexus. Learn more.

Pile it on. Marketplace facilitators will be subject to new tax and reporting requirements in Oklahoma starting January 1, 2023, including an obligation to screen high-volume sellers. Learn more.

Sales tax compliance? We got this. According to a recent survey of U.S. retailers, many businesses believe they’ve done what it takes to be 100% compliant with internet sales tax and marketplace facilitator laws, and a growing number of businesses are relying on technology to help with that compliance. Learn more.

Saving on tax in virtual realms. Most states haven’t yet said whether sales tax applies to transactions occurring in virtual worlds like Decentraland or Nikeland. That doesn’t mean such sales are necessarily exempt. Learn more.

The curtain hasn’t closed on brick and mortar. Though ecommerce took center stage during the first two years of the pandemic, brick-and-mortar stores remain an important channel for many retailers. Even digital natives are falling for physical stores. Selling through several channels is optimal for many businesses, but that can create several compliance challenges. Learn more.

The hidden hard side of easy returns. Every consumer appreciates an easy return process, but sometimes what makes a return easy for consumers can make sales tax compliance hard for businesses. Learn more.

Unhappy holidays. Thanks to Fonzie’s antics on a flagging “Happy Days,” jumping the shark has come to mean “a new trajectory of unrecoverable decline.” I give you Florida and its 2022 sales tax holidays. Learn more.

Beyond the border

You can’t bring that here. Tariff and supply-chain snarls have complicated cross-border sales in recent years for many businesses importing goods from China. Those tie-ups have nothing on the new Uyghur Forced Labor Protection Act (UFLPA) that took effect June 21, 2022. Learn more.

From the pump

A mishmash of fuel tax relief. With fuel prices skyrocketing, several states are offering state gas tax holidays and President Biden is calling for a three-month holiday from federal fuel taxes. If his administration can push the bill through, the United States will join a growing list of countries providing fuel tax relief. Learn more.

From the tap

Colorado taxes DTC wine deliveries. Starting July 1, 2022, retailers registered for sales tax in Colorado must collect a $0.27 retail delivery fee on sales of taxable tangible personal property — including direct-to-consumer (DTC) wine shipments — delivered by motor vehicle to a Colorado address. Colorado is the first state in the nation to create such a fee, but it may not be the last. Learn more.

How old are you? The Massachusetts Alcoholic Beverages Control Commission is upping efforts to ensure DTC alcohol shippers don’t deliver alcohol to minors. Learn more.

New requirements for direct shippers hit the Last Frontier. Breweries, distilleries, and wineries can currently ship directly to consumers in Alaska without a direct shipment license. That will change as of January 1, 2024. Learn more

From the wire

It’s not a tax. How do two countries that agreed not to tax digital services take money from digital service providers without violating those agreements? Easy: Call it a mandatory payment to a government, not a tax. Learn more.

Who, or what, sent that text? Many of us now regularly receive automated text notifications from doctors, food delivery apps, transit agencies, and more. Such communications are powered by an application programming interface, or API, which can be tricky to classify for tax purposes. The more widespread they become, the more important it will be for states to define APIs and determine how to tax them. Learn more.

Up in smoke

It’s not a tax. How do two countries that agreed not to tax digital services take money from digital service providers without violating those agreements? Easy: Call it a mandatory payment to a government, not a tax. Learn more.

Who, or what, sent that text? Many of us now regularly receive automated text notifications from doctors, food delivery apps, transit agencies, and more. Such communications are powered by an application programming interface, or API, which can be tricky to classify for tax purposes. The more widespread they become, the more important it will be for states to define APIs and determine how to tax them. Learn more.

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