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This ruling is actually a larger problem than Amazon. It effects businesses of all kinds, even those that do not touch online marketplaces like Amazon. My comp
by teilo 7y ago
This ruling is actually a larger problem than Amazon. It effects businesses of all kinds, even those that do not touch online marketplaces like Amazon.
My company has an online presence, selling and shipping out of one state, on our own custom-developed online platform. We also have a very large "offline" business selling in-store visual merchandising material to major retail chains. But it's all produced in and shipped from one state. We also have a small New York sales office.
In the past, we have only had to collect sales tax for three states. Our home state, New York, and California. California is interesting. They decided that since we travel there a lot, and do a significant amount of business there, we have a business nexus there. The key was really the amount of travel we do there, even though we have no CA office.
But now, with the Wayfair ruling, the bar has been substantially lowered. An economic nexus is now sufficient to require us to collect sales tax. We decided to get ahead of the freight train heading our way. Rather than waiting for the states to come knocking on our door, we ran the numbers and determined that we now need to file in about 75% of the states. This is a huge burden. Even calculating the tax is a nightmare, not to mention filing.
Thankfully, I was already leading a project to integrate a 3rd-party tax calculation service into our ERP, so the calculation side of things is covered. Filing is another matter. For that we engaged our accounting firm, who offers filing as a service. It isn't cheap, but it's cheaper than hiring the additional staff it would have taken to keep up with this.
I expect that these types of calculation and filing services are going to be doing a lot of additional business very soon.