In our attempt to keep you aware of changes in Sales Tax that may affect you, or your clients, we will sometimes preempt our regular state-by-state Sales Tax travel log to bring you an 'In the News' feature.
Sales Tax Goes 'Ouch' for Fairground Retailers in California
California is making sales tax returns harder than ever for retailers that sell tangible personal property on the real property of any California state-designated fairgrounds. While there is no 'extra tax' due from these retailers on their sales, retailers will be required to report them separately on their sales and use tax returns starting July 1st (2018).
These new provisions not only apply to retailers with permanent places of business on fairgrounds, but even temporary vendors doing business at a fairgrounds. So if a vendor sets-up a booth at a festival, swap meet, home and garden show, flea market, car show or any other temporary event being held on a California designated fairgrounds, they not have a new requirement to meet with regard to their reporting of sales taxes.
Imagine the guy selling the 'Slico-dico-matic' at the home show that travels across California from one fairgrounds to the next. While he doesn't have to obtain a different temporary sales tax permit for each show, he does have to report his total sales and sales tax collections separately on his sales tax returns. The new requirement only applies for sales 'actually made' on the fairground premises, if he subsequent sells to a customer he met at such a show, but that sale takes place off of the fairgrounds, then the sell would be reported normally.
Iowa leaps into Online Sales and Use Tax Reporting for Non-collectors
Just a few weeks back we covered Iowa in our state-by-state Sales-tax tour, but now Iowa has taken the leap into the group of states enacting requirements for Non-collectors to report sales related to sales and use tax requirements. The changes are part of a tax reform S.F. 2417 proposed by Iowa Governor Kim Reynolds and should take effect in January of 2019 once the Iowa Department of Revenue has finalized guidelines for out-of-state seller making sales in Iowa.
Iowa is following the path of Alabama, Minnesota, Oklahoma, Pennsylvania and Washington who are insisting that tax collection obligations are not limited to sellers with a physical presence in the state, but are associated with the economic ties a seller has to the state.
Starting January 1, an out-of-state seller must register with the Iowa Department of Revenue and must collect and remit Iowa sales and use taxes when, in the current or immediately preceding year it either has gross revenues from Iowa sales equal to, or exceeding, $100,000.00, or it makes 200 or more separate sales transactions to anyone within the State of Iowa.
There are a lot of other regulations and legal 'mumbo-jumbo' in the act, so be sure to check it out at the URL link provided above.
Iowa isn't the only state implementing 'economic nexus', if you want more information on economic nexus provisions in your own state, or states with whom you do business, check out Avalara's guide at this website.
Washington Offering Marketplace Fairness Penalty Reduction
As we just told you, Washington (state) is one of the economic nexus states that insists out-of-state retailers have obligations to register, report and remit sales and use taxes under certain conditions.
Their enactment of their Marketplace Fairness law which went into effect on January 1, 2018 was designed to deal with the loss of revenues Washington believed they were otherwise entitled to.
Despite the fact that the legislation has been in force for less than 6-months Washington is now giving non-compliant out-of-state sellers, refers and E-commerce marketplaces the opportunity to register and pay any prior tax obligations by June 30, 2018 with reduced penalties.
This amnesty-like program will also limit the look-back period which is the length of time a business can be held liable for successful applicants under these provisions.
For more information regarding this 'penalty reduction' program, please see the Washington State Department of Revenue's official website regarding the offering.
As you can see all three of these states are making sales and use tax more complicated than ever, that's why you need the help of sales tax professionals like Avalara to help you navigate sales and use taxes within your overall business framework based upon not only your own state's rules, but the laws of every state in which you do business.
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While some states may offer 'temporary amnesty' regarding sales and use taxes from time to time, the vast majority of states are out to insure compliance using audits, fines, and penalties under their enforcement powers. The "tax man cometh, and he taketh away"...especially if you are non-compliant, and staying compliant is many times harder than you think.
Avalara provides solutions for sales tax automation, including tax calculation, exemption certificate management, returns processing and 1099 filing and reporting. Automation via Avatax gives you the assurance of compliance without sacrificing productivity so that your sales tax is way less taxing than ever before.