30 Jan, 2017, 10:35 ET
DALLAS, Jan. 30, 2017 /PRNewswire/ -- E-commerce continues to be a booming industry, so it should be no surprise that enforcing tax collection by out-of-state sellers is at the top of many, if not most, states' agendas. Accordingly, we continue to see states taking steps to close the gap on remote seller tax collection. South Carolina and Minnesota are just the latest states to take legislative action. Please see below for information on the nexus changes that are potentially coming our way:
On January 10, 2017, SB 214 was introduced in the South Carolina Senate. The bill creates a rebuttable presumption that a retailer will be held liable for sales tax if they enter into an agreement with a South Carolina resident, whereby the resident refers potential customers via website links or other means in return for some sort of consideration. The presumption will only apply if the referrals result in more than $10,000 in gross proceeds during the prior 12-month period.
On January 9, 2017, S.F. 45 was introduced in the Minnesota Senate. The bill expands the definition of "retailer maintaining a place of business in this state" to include, among other things, a retailer with a marketplace provider operating in the state. A marketplace provider is one who facilitates retail sales by the out-of-state retailer, by listing or advertising for sale the retailer's items or services in any forum, either directly or indirectly through agreements or arrangements with third parties who collect payment and transmit it to the retailer. Whether or not the marketplace provider receives payment for its service is immaterial.
We expect to see several more states advance legislation this year seeking to impose a tax collection obligation on e-commerce retailers. While e-commerce revenue will attract the most attention, we also expect some states to give serious consideration to expanding their tax base to include more services along with evaluating the revenue implications from the sharing economy.
Ryan is an award-winning global tax services firm, with the largest indirect and property tax practices in North America and the seventh largest corporate tax practice in the United States. With global headquarters in Dallas, Texas, the Firm provides a comprehensive range of state, local, federal, and international tax advisory and consulting services on a multi-jurisdictional basis, including audit defense, tax recovery, credits and incentives, tax process improvement and automation, tax appeals, tax compliance, and strategic planning. Ryan is a five-time recipient of the International Service Excellence Award from the Customer Service Institute of America (CSIA) for its commitment to world-class client service. Empowered by the dynamic myRyan work environment, which is widely recognized as the most innovative in the tax services industry, Ryan's multi-disciplinary team of more than 2,100 professionals and associates serves over 12,000 clients in more than 40 countries, including many of the world's most prominent Global 5000 companies. More information about Ryan can be found at ryan.com.
TECHNICAL INFORMATION CONTACT:
Jeremiah T. Lynch
Share this article