Managing sales tax is a matter of gratitude. You won’t get the demand to collect accurate sales tax from customers or submit declarations and taxes in time and properly, but you will be in hell and punished for miscalculation. Sales tax requirements are not easy, but they are particularly difficult in 10 states, including Arizona, California, Colorado, Florida, Illinois, Louisiana, Missouri, New York, Tennessee and Texas. Alabama and Kansas deserve respect. The complexity of collecting, remitting and returning sales taxes in these States constitutes a perfect storm, making sales and use tax declarations in these jurisdictions very painful. Contributing factors include:
Local governments have the right to establish and manage their own sales and use tax rates and rules in the \
Colorado has nearly 100 home rule local self-government groups, of which about 70 manage their own sales and use taxes. Here, the region also has the right to tax or exempt nearly 20 kinds of products (such as household food or Unicorn wood products). As a result, businesses must deal with jurisdictions in addition to the Colorado IRS. Louisiana has nearly 200 local tax jurisdictions, and local tax authorities can exempt or partially exempt specific sales. As in Colorado, it is best for businesses to contact the regional tax authorities to determine their tax obligations.
Most of these states are trying to improve and simplify the sales and use tax system to some extent. For example, Alabama now simplifies ssut (seller’s use tax). Remote sellers can apply for a unified 8% tax on all taxable sales in the state instead of changing the consolidated tax rate. Ssut participants can only be audited at the Alabama Internal Revenue Department, not the local tax authorities. Arizona has centralized licensing and reporting capabilities, so businesses no longer need to report to regional tax authorities outside the Arizona IRS. Nevertheless, sales and use taxes in countries that comply with family rules are still very complex.
Non traditional sales tax a few states have tax transactions that do not levy traditional sales tax. This can complicate compliance for retailers operating in multiple states. Arizona has a transaction privilege tax (TPT), which is a tax levied on sellers for the privilege of doing business in the state. TPT tax rates are visible in this TPT tax rate table and depend on the type and location of business activities. Illinois sales tax refers to the Possession Tax and sales time levied on the seller’s invoice, and the use tax levied on the buyer when the retailer does not levy tax (retailer’s possession tax, service Possession Tax, service use tax, use tax). In addition, there are many special taxes such as Chicago home rule Municipal soft drink occupation tax.
Sales tax holiday sales tax holiday or tax holiday is the time when the state temporarily stops the sales and use tax on specific products. As can be seen from the catalogue exempted from sales tax in 2019, it generally lasts from weekend to week and is only applicable to specific commodities, such as clothing, energy-saving products or school supplies. The tax exemption period brings trouble to the enterprise for the following reasons:
。 Regional complexity: suitable varieties can be exempted from regional sales tax or regional sales tax (for example, cities in Alabama do not need to participate). Price limits: most states set price limits on eligible goods (for example, clothing less than $100 will be exempted, but clothing more than $100 will be taxed). Capricious: all items in the category are not exempt (for example, football uniforms are exempt and football pants are taxed during the sales tax exemption period in Texas). In addition, the tax holiday occurs at different times of the week. For example, the school holiday in Alabama in 2019 is mid July, Florida is August 2-6, and the clothing and school supplies tax holiday in Texas is August 9-11.
Another complication is that states can provide a one-year sales tax deduction, but may not provide it the next year. Wisconsin provided a sales tax exemption in 2018, but decided not to do so in 2019. In addition, state governments do not always provide enough time for businesses to prepare for sales. Tax leave. Think about what happened in Massachusetts in 2018. August 10: Governor Charlie Baker signed the sales tax relief act August 11: Massachusetts internal revenue service, tax exemption period issued August 11: sales tax relief began. Alabama, Florida, Louisiana, Missouri, Tennessee and Texas are 17 states that will reduce sales tax at least once in 2019.
The impact on remote sellers assumes that rule requirements, sales tax exemptions and other complex factors will affect more sellers than before. Until the U.S. Supreme Court announced its judgment on WAYFAIR, Inc., South Dakota (June 21, 2018), the state mainly restricted the sales tax of physically existing enterprises in the state. WAYFAIR’s decision invalidates the physical presence rule, which may require state governments to levy sales taxes and remit money to sellers in other states. After the decision of WAYFAIR, among the 45 states with general sales tax (including Washington DC), all but two states adopted the economic connection law based on the obligation to levy remote sales tax on their economic activities. Only Florida and Missouri (the three toughest selling States) have not yet done so.
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