VATLive > Blog > US Sales Tax > US reviews e-commerce Sales Tax - Avalara

US reviews e-commerce Sales Tax

US reviews e-commerce Sales Tax

The US Treasury has said that the administration will shortly revisit Sales Tax on goods sold by out-of-state e-commerce Sellers.

At present, Sellers with no physical location in another US state are not required to charge the Sales Tax of the state when the consumer is resident there. Instead, the consumer is obliged to voluntarily self-declare the tax in a usage report. In practise, there is very limited compliance with this obligation. This regime follows a Supreme Court ruling in 1992 – which did not reflect the massive explosion in cross-state e-commerce.

Many in-state online and bricks-and-mortar retailers claim this leaves them at a considerable competitive disadvantage to out-of-state retailers who effectively do not have to charge Sales Tax.

To change the current position, the US Congress must decide to change the legislation.  The 2013 Marketplace Fairness Act laid the ground for this, and was passed by the Senate, but has since stalled.

The current administration now wishes to re-start this as there is a need to raise funding for infrastructure works.

Amazon, the largest US e-commerce player, is now charging Sales Taxes in all states where it is levied.

Latest American news
US, Mexico & Canada e-commerce sales tax & duty thresholds
October 12, 2018

As part of the NAFTA renegotiation completed on 1 Oct 2018, the US has secured a rise in the duty-free threshold for e-commerce sales from...
US Congress bill to curb out-of-state Sales Tax Jan 2019
September 19, 2018

US legislators in Congress are to consider two bills providing for a consistent imposition of the ‘economic nexus’ Sales Tax test, including a $10million annual sales...
US Wayfair e-commerce ruling hits non-US retailers
September 17, 2018

On 21 June 2018, the US Supreme Court introduced a new ‘economic nexus’ test to determine if out-of-state online retailers are responsible for charging Sales...

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.