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States Seize on Ruling and Grab to Tax Online Sales


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6/26/2018
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States Seize on Ruling and Grab to Tax Online Sales

On Monday, Gov. Scott Walker of Wisconsin was among the first to announce a tax on online sales was in the works.  Walker claimed that Wisconsin would keep the tax burden level by cutting other taxes in the same amount received from the additional sales tax revenue.

Wisconsin is expecting between $123 million to $187 million in increased revenues from online sales tax.

New Jersey was also quick to jump on the bandwagon of taxing online sales.  A bill was introduced following the ruling that is modeled closely after the South Dakota economic nexus law which was recently upheld by the U.S. Supreme Court. The bill requires remote sellers with annual retail sales exceeding $100,000 into the state, or at least 200 in-state transactions, to collect and remit sales tax on their sales. The bill is expected to be amended to include language that would force online platforms to either collect on behalf of their third-party sellers or ensure that they are doing so on their own.

As a result of these expected legislative nods, Software vendors like TaxCloud have started to ramp up efforts to close new customers in the wake of the landmark ruling.  The volume of registrations for TaxCloud software almost tripled and the number of phone calls more than doubled, and has continued growing since, says David Campbell, TaxCloud’s CEO.

TaxCloud (discussed at oral argument), TaxJar, Avalara Inc., and Vertex Inc. are some of the players that stand poised to increase business dramatically based on the heightened need for medium sized businesses to implement sales tax compliance at a fever pitch.  And, the market has taken notice.  Avalara, for instance, saw its stock soar by as much as 33% on Thursday after the ruling was released.

https://www.jsonline.com/story/news/politics/2018/06/25/wisconsin-likely-collect-online-sales-taxes-cut-other-taxes-same-amount/730434002/

https://www.digitalcommerce360.com/2018/06/25/busy-sales-tax-software-vendors-offer-advice-to-retailers-in-wake-of-the-u-s-supreme-courts-ruling/

https://www.chainstoreage.com/news/regulatory-wrap-up-insiders-weekly-recap-of-retail-related-legislation-june-25/



Category: Tax Law


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