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Wayfair Ruling Spurs Congressional Action
For over two decades, Congress has introduced legislation to address the issue of online sales tax collection, given that until June 2018, the Supreme Court ruled that tax collection had to prove a physical presence in their state to assess taxes on the purchase. That all changed in June with the Supreme Court ruling in favor of South Dakota’s law that would allow the state to collect sales tax from online purchases. While we believe strongly that every individual and business should be in compliance with all laws and regulations, the Court’s ruling creates significant challenges and exposes small businesses to a complicated and burdensome tax structure.
As stated by NASE CEO & President, Keith Hall, after the ruling, “Because of last week’s ruling, millions of self-employed businesses offering their goods and services for sale online could now have to navigate a nightmarish web of compliance challenges. The Government Accounting Office recently released a report showing that this ruling could cause the compliance costs for small businesses to skyrocket. Many of the small ‘Mom and Pop’ business owners we represent would incur the highest cost if Congress doesn’t act.”
The NASE continues to monitor activities by Congress to address some of the uncertainty created by the Court’s ruling. Just last week, Representative Sensenbrenner (R-WI) along with a bipartisan group of lawmakers, including Rep. Eshoo (D-CA), Rep. Lofgren (D-CA), and Rep. Duncan (R-SC); introduced,
“The Online Sales Simplicity and Small Business Relief Act” which would ban any retroactive taxation, established an orderly phase-in of compliance obligations, and creates a $10M small business exemption.