The online business world is abuzz over the changing dynamics surrounding states collecting sales tax from online out-of-state businesses. Okay, “abuzz” probably isn’t the correct word, but this is a family-friendly site so we’re trying to avoid out and out cursing. You can view the videos linked below to learn more about the developments in this area of taxation and law, but the good news we are covering in today’s video is there are five states that don’t collect any sales tax at all, offline or online, making your life a bit easier.
Expect every state that has a sales tax to start charging online retailers by the end of 2019. Welcome to the Internet sales tax boondoggle. States such as Colorado have already enacted changes to their tax rules and regulations to this extent, but the new paradigms don’t come into force until various periods in 2019.
Is there any chance that Congress or the Supreme Court will step in and address the burden on small businesses created by each state having different rules and regulations for sales tax? It seems unlikely. There is no federal sales tax, and the political makeup of Washington D.C. at the moment does not portend to one coming into place. As for the Supreme Court, the Court just addressed the issue of Internet sales tax and usually is unwilling to revisit its own decisions in a speedy manner. 20 years may well pass before the Court takes up the issue again. Even then, the issue would undoubtedly be more about requiring states to unify their procedures to reduce the burden on businesses versus any effort to repeal the right of states to collect sales tax from out of state retailers.
Internet sales tax is here to stay whether we like it or not.