Federal Taxation of “Remote Sales” is broader than just Internet sales

U.S. Senate Bill 743 (Marketplace Fairness Act of 2013) will impact many more businesses than you may think. The Bill allows states to demand that sales tax be collected on “remote sales” made by “remote sellers”.  The press is focusing on e-commerce companies such as Amazon and Overstock, but the Bill will also significantly impact companies that don’t make Internet sales.  https://www.salestaxstrategies.com/index.html

The Bill defines “Remote sale” to mean: a sale into a State in which the seller would not legally be required to pay, collect, or remit State or local sales an use taxes unless provided by this Act”.

Nowhere in this definition is the word “Internet” used and nowhere is the term “e-commerce” used.  This Bill will impact every company that makes a sale to a customer outside of its border regardless of how the sale was made.  No longer is is necessary for a company to have “nexus” in the state before it is required to collect the tax.  There is no de minimis level of sales in a state that would not require the company to collect the tax.

Any business with more than a total of  $1 million in “remote sales” is impacted by this Bill.  Given the huge disparity in state laws compliance with these rules could be crippling for small businesses.

Even if your business does not make Internet sales, you are likely to be impacted by this Act.  Stay alert to its progress through Congress.
Ned Lenhart, CPA
Interstate Tax Strategies