New Sales Tax Legislation in Congress
On September 14, Congressmen introduced the Online Sales Simplicity and Small Business Relief Act of 2018. The proposed legislation is in response to the Wayfair ruling that happened in June which allows states to impose sales tax on a seller that has no physical presence within that state. Under the old law, online sellers without a physical presence in a state wouldn’t have a sales tax obligation. 

Since the Wayfair ruling, many states have come out with their own guidance conforming to the Wayfair decision. It has become a concern that states will now extend their reach in collecting sales tax making it difficult for small business to collect and remit sales tax in multiple jurisdictions.

The new legislation attempts to rein in the states and set some limits for how they can collect sales tax under the new ruling by:

  • Not allowing states to retroactively tax remote sales that occurred before the Wayfair ruling (6/21/2018)
  • Phasing in the new law but preventing states from instituting new collection requirements before 1/1/2019
  • Creating a small business exemption for remote sellers with less than $10 Million in gross receipts

If this legislation passes, it will provide some relief for small business and remote retailers having to conform to new collection standards after the Wayfair ruling. We will continue to monitor the progress of this legislation.

If you have any questions on how this recent sales tax activity might impact your own tax situation please contact a member of our tax team 859-331-1717.