Category Archives: online sales tax

Ohio’s New Online Sales Tax: Now Cookies Can Create Nexus?

Flag of Ohio sticking in a variety of American banknotes.

Is Ohio’s new approach to online sales tax justified?

What do cookies, nexus and online sales tax have to do with each other? States are continuing to look for ways to justify charging sales tax to internet retailers; Ohio just took a page out of Massachusetts’ book.

Massachusetts’ Online Sales Tax Directive 17-1

A couple of weeks ago we shared that Massachusetts created a directive that redefined nexus to include internet cookies, which meant that the state was recognizing these bits of computer code as a way to establish a physical presence, therefore making internet retailers responsible for collecting and remitting sales tax from online shoppers. Continue reading

What’s New in Massachusetts? An Online Sales Tax Update

Have you been following the latest online sales tax directives from Massachusetts?

A couple of weeks ago we summarized Massachusetts’ Directive 17-1, a new piece of online sales tax legislation that redefined physical presence to include downloaded apps and internet ‘cookies’ – the data websites store on users’ computers and phones to track visits. While Directive 17-2, which repealed the prior directive, was announced at the end of June, the original law redefining physical presence (or nexus) was so distinctive that we wanted to take a closer look at the rule.

Massachusetts’ Online Sales Tax Directive 17-1

What made this state’s approach to online sales tax so uncommon? Sylvia Dion, our colleague and a principal at PrietoDion Consulting Partners, provides a nice summary in a recent blog post for SalesTaxSupport.com. I’ve included a few of her key points below, but the reason so many opposed it (including trade groups) is that it redefines nexus, twisting established precedent to justify collecting sales tax from internet vendors.

It’s worth noting that, unlike other states that have enacted online sales tax legislation, Directive 17-1 was established as an administrative policy from the Massachusetts Department of Revenue rather than the state legislature. Also, because the directive clearly targets “internet vendors,” there is a strong argument that it could be discriminatory.

The most interesting part of this directive, however, is the detailed discussion and justification accompanying it, contorting previous precedent and state law to increase the number of online retailers responsible for charging customers for state sales tax. Continue reading

What You Need to Know About Massachusetts and Online Sales Tax

Side view of a piggy bank with the flag design of Massachusetts

How is Massachusetts approaching online sales tax? This post explains!

Over the last couple of months we’ve been taking a closer look at how various states are approaching the issue of online sales tax. Some states, like Washington and Nevada, have enacted “Amazon Laws” that make some retailers responsible for collecting and remitting state sales tax. Other states, such as Arizona, haven’t created new legislation directly about the issue yet and seem to be waiting to see how the debate is settled, either in Congress or through other states’ laws.

Today we look at a state that has been a little bit slower to enact online sales tax legislation, but is starting to make changes internet retailers need to know about: Massachusetts. Keep reading for the details. Continue reading

IT’S ALL GREEK TO ME!- US MULTISTATE TAX & FOREIGN COMPANIES

Santorini, Greece

I just returned from an amazing vacation – a cruise of the Mediterranean.  We started in Athens, Greece; spent just a couple days there enjoying the history, and then boarded our ship.  The cruise took us to the Greek isles of Santorini and Crete, and then we sailed to Italy, the beautiful St. Tropez, France, and finally Barcelona, Spain.  We finished our vacation by sampling many, many tapas and wines in Barcelona.  About midway through our vacation, I found myself wondering – how could I do US multistate tax consulting somewhere in Europe?  I’m still working on that angle, and will certainly keep you posted.

But meanwhile, on the flip side of that equation, we’ve been engaging with several foreign companies who have US operations and find our state tax laws to be, well, challenging!  As I tell all my foreign clients – trust me, they are challenging for US companies too!  Here are some of the main things for foreign companies to think about as they begin doing business in the US.

Continue reading

What You Need to Know about New York’s Online Sales Tax

Side view of a piggy bank with the flag design of New York.

How does New York approach online sales tax? This blog post explains.

Overall, the topic of collecting online sales tax is not as cut and dry as some would first assume, with ambiguous meanings and regulations, often confusing business owners. And hopefully, that’s where we come in to help!

In our series we have talked about multiple states, including Nevada, Washington and Colorado, and how each one handles the issue surrounding online sales tax for their state; up next in the lineup is New York.

A Summary of New York’s Online Sales Tax Law

New York was the first state in the country to enact a law for larger internet retailers (back in 2008). This law is referred to as the “Amazon Law,” based on the large internet retailer that used to have physical presence in very few states and therefore wasn’t required to collect sales tax. Amazon has now changed its business model and has worked with many states to collect sales tax. However, over the past several years, many states enacted “Amazon Laws” or “click through” statutes to get ahead of the company and internet retailers. New York was simply the first! Continue reading

An Interesting Look at Nevada and Online Sales Tax

Side view of a piggy bank with the flag design of Nevada.

Check out this post for a look at how Nevada is approaching online sales tax!

If you’ve been following along with our series about various states’ approach to online sales tax, you can see how multi-state tax issues can get confusing for business owners quickly.

At this point we’ve taken a look at the how Colorado, Alabama, Washington, Texas and Arizona establish nexus, which determines eligibility for state sales tax; today we review Nevada.

A Summary of Nevada’s Online Sales Tax Legislation

Nevada is one of the states that enacted the “Amazon Law” back in 2015. As Nolo.com explains, this means that a couple of years ago the state extended nexus to include:

  • Retailers that have an agreement with a business or seller located in Nevada to pay for customer referrals obtained via a link on the Nevada seller’s website (a click-through arrangement)
  • The out-of-state retailer’s gross receipts from these directed sales to Nevada customers exceeds $10,000 during the preceding four calendar quarters

Continue reading

The Inside Scoop: Arizona’s Approach to Online Sales Tax

Side view of a piggy bank with the flag design of Arizona

How does Arizona approach online sales tax? This blog post explains!

Have you been following our series on how states are approaching the online sales tax debate? So far we’ve taken a look at Colorado, Alabama, Washington and Texas; today we look at Arizona! Keep reading to see how the Grand Canyon State is approaching the issue.

A Summary of Arizona’s Online Sales Tax Legislation

Unlike the other states we’ve covered so far, Arizona interprets the 1992 court case, Quill Corp. v. North Dakota, a little bit more directly. The precedent set forth established that companies need to have a physical presence in the state (or nexus) in order for the state to collect sales tax on a purchase.

While many states establish economic nexus through a variety of provisions, Arizona’s 2015 Tax Handbook clearly states that physical presence as defined by Quill is key. And, as Nolo.com points out, “According to the same section, a company with no physical presence in the state, but whose products are both available in independently-owned Arizona stores and directly from the company via the internet, is not responsible for collecting sales tax.” Continue reading

Online Sales Tax in Texas: What Do You Need to Know?

Side view of a piggy bank with the flag design of Texas.

How is Texas handling the online sales tax debate? This blog post explains!

Have you been following the online sales tax debate? Congress hasn’t been able to come up with a solution at this point, so states are taking matters into their own hands. This series showcases how various legislatures across the country are approaching the issue. So far we’ve covered Colorado, Alabama and Washington. This week we take a look at Texas.

A Summary of Texas’ Online Sales Tax Legislation

Although the 1992 court case, Quill Corp. v. North Dakota, set precedent that companies need to collect sales tax from customers in states where the business has a physical presence (or nexus), many states – including Texas – interpret that to mean that they can collect sales tax if your enterprise has established nexus in their state by other than just physical presence. This is often referred to as economic nexus. Continue reading

What Do You Need To Know About Washington’s Online Sales Tax?

Side view of a piggy bank with the flag design of Washington.

How does Washington state approach online sales tax? This post explains.

The online sales tax debate continues, with states taking matters into their own hands instead of waiting for Congress to decide how to settle the matter. However, not all states are approaching the issue the same way. We’ve already looked at current and potential legislation in Colorado and Alabama; next we venture to Washington state!

A Summary of Washington’s Online Sales Tax Legislation

As we’ve previously explained, Washington prompted online sales tax collection by expanding its definition of nexus. Back in 2015, they rolled out the five-point internet sales tax solution, followed by establishing nexus through click-through retail solutions. Continue reading

An Interesting Look: Alabama’s Latest Online Sales Tax News

Side view of a piggy bank with the flag design of Alabama.

How is Alabama approaching online sales tax? This post explains.

A couple of weeks ago we started a series that looks at the ramifications of various online sales tax legislation states across the country are proposing and signing into law. We started with Colorado as they’ve been at the forefront of the debate since 2010. Today we take a look at Alabama!

Alabama has been making waves in the state tax world because it passed legislation in 2015 that requires an out-of-state seller making retail sales within the state to register, and collect and remit sales tax on these sales by virtue of “economic nexus” if the seller has sales of more than $250,000 within Alabama, and engages in certain limited activities in the state. However, it does not require substantial physical presence as required in the 1992 Supreme Court decision (Quill). With the passage of these laws, Alabama drafted legislation that is unconstitutional and effectively challenging taxpayers to take the issue to court (or is challenging the federal government to finally enact some of the bills which have been circulating in Congress but have not passed). Whether that’s “simplified” or not is a question, but read on for a summary of the latest activities in the state. Continue reading