This guest post was written by Mark Faggiano, Founder of TaxJar, the easiest way for online sellers to simplify tracking and managing their sales taxes.
Unless you completely block out the news these days (who could blame you), you’ve probably heard that Congress is putting the issue of sales tax directly in its crosshairs. Sales tax is now officially on the list of ways to try to reign in the budget deficit.
The proof is called The Marketplace Fairness Act. It’s a recently introduced federal piece of legislation that could be a game-changer for small businesses – especially those who make a living selling online.
Included in the bill is a requirement that online sellers collect and remit sales tax for out-of-state purchases. As you’re probably aware, no federal law is currently in place that requires online sellers to collect and pay sales tax for purchases coming from out-of-state. So for example, if you’re an online seller located in California and sell your wares to someone in Georgia, you’re probably not collecting and remitting sales taxes to the Peach State. That very scenario is now what’s at stake for the millions that make a living selling online.
States loves this because, in theory, the new law should increase their revenues any small businesses will carry the resulting burden.
The Marketplace Fairness Act could also include a revenue threshold for small businesses before the additional tracking and reporting requirements kick in. What’s more, states may be asked to either provide a simplified sales tax code for out of state purchases, or provide software to make the process simpler for small businesses.
What’s this all mean? It means that something already super confusing like sales tax could get even more complicated in 2013. A new bill could bring more forms, more deadlines, more paperwork, and more compliance issues. That sounds to me like more confusion.
TaxJar is sales tax tool whose mission is to eliminate sales tax pain for small businesses. We’ll be keeping close tabs on any legislative updates and will provide sellers like you with both the information and tools you need to help simplify your sales tax requirements. Less time on sales tax. More time running your business.