Episode 85 - Sales Tax Regulations and the Implications for Online Retailers

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  • 8/30/2018
    On this episode, Scott Peterson, the Vice President of U.S. Tax Policy and Government Affairs at Avalara, joins Craig Israel and Bruce Williams via Skype to discuss the changing landscape in competition, technology and tax regulations surrounding online transactions. Listen in as he shares insights and advice for online retailers.

    What You’ll Learn in This Episode

    • What you need to consider when selling products via e-commerce
    • How recent state tax regulations are impacting online sales
    • How to navigate and prepare for potential sales tax law changes

    Episode Quotables

    “My job is to eliminate miscommunications and to make sure that we have a seamless interaction with all the governments in the United States.”
    “For a business that is operating remotely via e-commerce, if you have to collect sales tax, you have to understand the rules in every place where you have a customer. In a physical store, the customers come to you and you have one set of rules that you apply to everyone who walks into the door. In an e-commerce world, your customers come to your website, but you don’t know where they are [located] when they show up.”
    “At a minimum, you need to know what that customer bought and where it’s being delivered. Everything else is irrelevant from a sales tax compliance perspective.”
    “Since 1967, if a state wanted to force you to collect its sales tax, you had to have some degree of physical presence inside that state, such as employees, a store, a warehouse or inventory. Two years ago, South Dakota passed a law that said, notwithstanding what the Supreme Court has said, we want to impose sales tax on people based on the amount of sales they make in our state.”
    “The United States Supreme Court said that physical presence was a lousy test because it creates really odd outcomes.”
    “Unless Congress steps in and regulates interstate commerce by this time next year, every state with a sales tax will have this identical law. Anybody in e-commerce who is making sales around the world is going to have to start keeping track of the number of sales and the dollar amount of the sales they make in every state.”

    Episode Resources

    Read about the Supreme Court’s decision in the Wayfair online sales tax case.

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