The US Senate on Monday passed the Marketplace Fairness Act which seeks to empower states and territories to collect sales and use taxes on products purchased over the internet and shipped into their tax jurisdictions.
Leaving aside the politics, here are some key points:
Small Seller Exemption
Section 2, subsection C of the Senate bill exempts remote sellers with "...gross annual receipts in total remote sales in the United Stated in the preceding calendar year..." of less than $1 million. There has been some discussion that this number will be raised to $10 million, though the text bill does not reflect that.
Will I have to collect, file, and remit taxes in all 50 states, the District of Columbia and the territories?
Maybe. States are not obligated to collect sales taxes from remote sellers. Section 2 of the act states that "A State may exercise authority under this Act beginning 90 days after the State publishes notice.." of their intent to do so. Non-member states ( D.C. and the territories ) are forced to wait 6 months before they can begin to enforce the Act. Several states do not have sales taxes, and given that this is optional on the part of those that do, the number of states that require collection and remitting will change over time.
How can I deal with 9600+ separate tax rules?
That's going to be challenging for your E commerce provider but not for you, though will still have to write all of those checks. The states must do 3 things before they publish their intent:
What if there are mistakes?
The Act protects sellers from liability incurred due to errors made by certified software providers. It also protects certified software providers from bad information given them by the remote sellers.
What is Cairn Applications doing about the Marketplace Fairness Act
Many of you will be aware that Cairn has been building a new proprietary E Commerce solution called myStore. The Marketplace Fairness Act has been in the works during most of the this development cycle and as such we have built in a tax calculation module. At present, the module is little more than a placeholder, given how little is known about this Act and it's viability.
This tax module will be activated by a user option on myStore and it looks like periodic ( monthly, yearly ) reviews of the trailing 12 months sales will be necessary in order to tease out our client's small seller exception status.
We have a number of questions regarding the implementation of the law and have been in contact with U.S. Senator Kelly Ayotte's office for Clarification. Mr. Thomas DeRosa at the Senator's Office is looking into our questions but was able to give the following:
Should the Marketplace Fairness Act become law, Cairn Applications will be seeking certification as a software provider in order to give our customers' customers the best possible e commerce experience with the least hassle over taxes.
Here is a copy of the Marketplace Fairness Act gleaned from marketplacefairnessact.org/bill-text/
The Made in New Hampshire Expo kicked off today and Cairn Applications was honored to have Miss New Hampshire, Megan Lyman, and Miss Stratham Fair, Samantha Massahos, light up the booth for this photo! Both of these ladies were extremely gracious to lend their celebrity to Cairn Applications. My kid got a kick out of it too!
Thank you both.
See all of the pictures from the Made In New Hampshire Expo
Cairn is exhibiting at the Made in NH Expo this weekend April 5th, 6th, 7th! Check out the photo gallery for the event including the App Mobile driving down halls at the Manchester, NH Radisson!
We'll be at the show all weekend meeting new people and hopefully setting up some meetings. New clients we meet at the show will receive 3 months site service for free! That's like 25% off!
Keep tabs on Cairn at the Made In NH Expo here!
Cairn Applications is going to the Made In New Hampshire Expo at the Radisson in Manchester on April 5th, 6th, and 7th! We are looking forward to a great show.
The Made In New Hampshire Expo features products and services from all over the Granite State.
If your company is in the market for a new web site or web application, now is the time. New clients we meet at the show will receive 3 months of free support when they sign with Cairn Applications. You get access to all the tools, all the support, and all the analysis free for the first three months!
We look forward to seeing you!