Next year marks the 25 year anniversary of Quill Corp. v. North Dakota – a U.S. Supreme Court ruling exempting online businesses from paying taxes in states they have no significant presence. 2017 may also be the year this exemption comes to an end.
There are currently two bills (the Marketplace Fairness Act & the Remote Transactions Parity Act) pending in Congress, either of which, if passed, would enforce big and small online businesses to collect sales tax no matter what state they do business in or sell to. Proponents of these bills, believe they will create a more fair marketplace between traditional (retail stores) and remote (online) sellers, because in the past online sellers have only been required to collect sales tax in states which they have a sales tax nexus.
Opponents, however, believe these bills would impede new startups by creating more (and very confusing) tax burdens on small businesses. Not to mention, many critics think the bills are unconstitutional, since states would be taxing across borders.
Just in case, we encourage any online retailer to be prepared. Find out more in Avalara’s detailed look at the implications the bills have and what they mean for you: Industry Report: The Online Sales Tax Showdown
Also, check out our blog post to see if you are currently complying with Sales Tax Nexus