Management and sales tax is a task that is difficult to please. You will not collect the correct sales tax from the customer, or submit the return and pay tax correctly in a timely manner, but you will definitely be punished because of mistakes.
Although the sales tax requirements are never an easy task, the following 10 states are particularly difficult: Arizona, California, Colorado, Illida, Louisiana, Missouri, Missouri, Missouri New York, Tennessee and Texas. The other two are worth mentioning: Alabama and Kansas.
The complexity of the sales tax collection, remittance and return of the above states caused a perfect storm, which caused the sales and use tax declaration of these jurisdictions to be abnormally painful. Promoting factors include:
Local Autonomy
Non -traditional sales tax
Sales tax holiday
Local place Autonomous Prefecture
In the \”Autonomous\” state, local governments have the right to formulate and manage their own sales and use tax rates and rules. Alabama, Arizona, Colorado, Illinois, and Louisiana are all autonomous states, and Alaska is also (there is no sales tax in the whole state, but local sales tax is allowed). As you expected, the autonomy of each state looks different.
For example Sales of business classification reports in cities and counties. About 20 local enterprises are classified, each of which can have its own tax rate. In addition, the jurisdiction can be deducted and exempted in unique places.
There are nearly 100 autonomous cities in Colorado, of which about 70 manages their own sales and use taxes. Here, localities have the right to tax or exempt from nearly 20 different categories of products (for example, home consumer foods or beetle wood products). Therefore, in addition to the Colorado Taxation Bureau, companies also need to deal with each jurisdiction.
In Louisiana, there are nearly 200 local tax jurisdictions, and local tax authorities can exempt or some exemptions. Like Colorado, it is recommended that companies contact the local tax authorities to determine their obligations.
It is praised that most of the above states are working hard to improve and simplify their sales and use tax systems. For example:
Alabama now simplifies the seller’s use tax (SSUT): Remote sellers can apply for all taxable sales entering the state 8% of the unified tax, instead of changing the comprehensive tax rate. SSUT participants can only accept Alabama Taxation Audit, not local tax authorities.
There are centralized permission and reports in Arizona, so in addition to the Arizona Taxation Bureau, companies no longer need to report to the local tax authority.
Despite this, the sales and use of taxation and use of local autonomous prefectures are still quite complicated.
Non -traditional sales tax
Tax transactions of a few states do not levy traditional sales tax. This will complicate the compliance of retailers who develop business in multiple states.
Arizona has a thing called transaction privilege tax (TPT), which is a privilege of the supplier’s business in the state. The TPT tax rate depends on the type and position of business activities, so the TPT tax rate table is shown.
The sales tax of Illinois is the occupation tax levied on the seller’s receipt and the retailer did not sell it when it was sold. The combination of taxes levied by buyers during tax collection: retailers occupy tax, service occupation tax, service use tax, and use tax. There are also many special taxes, such as Soft drinks in Chicago Autonomous City. Sales tax holiday
Sales tax vacation or tax exemption period is the time for states to temporarily suspend the sales and use tax of certain products. They usually last weekends to one week, and are only related to specific products, such as clothing, energy -saving products or school supplies, such as the 2019 sales tax holiday list.
Due to various reasons, the tax exemption period brings trouble to the enterprise, including:
Local complexity:
Eligible projects sometimes levy local sales tax, sometimes (for example, cities in Alabama do not have to participate).
Price Restriction:
Most states restrict the price limit of qualified goods (e.g. Clothing should be paid).
Repeated impermanence:
Not all products in a certain category meet the tax exemption conditions (for example, during the sales tax holiday in Texas , And football pants should be paid).
In addition, the tax exemption period occurs at different times in different states. For example, in 2019, the return holiday of Alabama was held in mid -July. Florida’s holidays were from August 2 to 6, and the tax exemption period for clothing and learning supplies in Texas was from August 9 to 11th.
Another complex factor is that one state may provide sales tax holidays within one year, but The next year will not be: Wisconsin has one in 2018, but it is decided not to provide one in 2019. In addition, the states do not always give the enterprise enough time to prepare for the tax exemption period. Consider what happened in Massachusetts in 2018: August 10: Governor Charlie Beck signed a sales tax holiday bill
August 11: Period
August 11: Sales tax holidays start
Alabama, Florida, Louisiana, Missouri, Tennessee and Texas At least one of the 17 states of the tax exemption period for the year.
The impact on remote sellers
The impact of local autonomy requirements, sales tax holidays and other complex factors on sellers than before.
Before the Supreme Court issued a ruling on South Dakota v. Wayfair, Inc. (June 21, 2018), the states were largely limited to the sales of companies that exist in the state in the state. tax. WayFair’s decision overthrow the existence of entities, which allows states to request state outdes in collecting and paying sales tax.
Since the decision In addition to the state of tax (plus Washington Special Administrative Region), all other states have passed economic connection to build remote sales tax collection obligations on economic activities instead of real existence. Only Florida and Missouri (the two most difficult sales tax states) have not yet done so. If you have not handled the sales tax in these strict sales tax, it is likely that you will have to deal with it as soon as possible. Are you interested in knowing more information? Watch the Tricky 10 -on -broadcast network seminar immediately.
