Will the Online Sales Tax Ruling Affect Your Small Business?

August 16, 2018 by OSYB Staff

Accounting Today shares, “The U.S. Supreme Court’s recent decision on states’ authority to collect sales tax from online retailers will have far-reaching implications for domestic businesses, unless states and policy makers act to reduce the compliance burden and prevent an unfair advantage.”

Authored by Justice Anthony Kennedy, the 5-4 opinion in Wayfair v. South Dakota  “overturned a 1992 case that required only retailers that had a physical presence in states to collect sales taxes.”  With this change, states can force retailers without a physical presence to pay tax on sales which would bring in millions of dollars in revenue to the states.

How can this affect your small business?  Keep in mind that states may have individual guidelines:

• you will be required to keep track of sales tax guidelines by state
• you will be required to keep track of individual sales tax collected by state
• you will be required to remit the sales tax collected to each state in compliance with individual state’s guidelines
• there will be an increase in compliance costs

If you are a small online business, stay informed.

For more information:  SCOTUS online sales tax ruling: A threat to small businesses?

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