It seems like every day there is another story about how much closer we are to receiving a federal law regulating online sales and taxes. I thought the LA Times had an interesting story which included a nice quote.
"If I were president of an online retailer … I would look at this week in Washington, D.C., and I'd make my plans to start collecting sales taxes wherever I sold things in the United States," said Sen. Lamar Alexander (R-Tenn.).
From my understanding, it is not just online retailers who will be affected by these new laws. Any company without nexus, but distributing, drop shipping or delivering goods in any way to a state will become now liable for collecting sales tax.
Let’s focus in on sales tax exemption certificates. In the past, if a buyer was working for a recognized exempt organization, they could buy from a local store and present an exemption certificate or else they could buy online and not worry about any of the paperwork. For those of you who have never worked retail, when a person at a cash register is confronted with a sales tax exemption certificate it pretty much shuts that line down until a manager comes to approve and hit that over-ride key. Or, it means going to a special line in customer service to make the purchase. The internet was just easier than dealing with the regulations that no one at retail really understood.
Now that internet retailers are being forced to deal with this issue – how well do you think they will respond to that piece of paper that says you should not be charged sales tax?
Other recent “Exemption Certificate Mgmt.” posts by Silvia Aguirre:
- Exemption Certificates for Federal Government Purchases
- Marketplace Fairness: What Does It Mean For Exemption Certificates?
- Will Oregon Start Charging Sales Tax? If So - Are You Ready?
- Canada is Bringing Back Exemption Certificates!
- Louisiana Changes State Forms to Include Parish Exemptions
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