Long ago (way back when I was married), I remember when my ex bought a slew of furniture to redo our living room. All directly from the North Carolina factories. (It was her money and I had no say in the purchase or the choices. But, that’s NOT the point of this discussion.)

About 2 years later, a certified letter arrived in the mail from the Commonwealth of Virginia. Addressed to me. (Trust me, I don’t like certified letters.) But, it was only addressed to me because we had been filing jointly for years and my name was the primary one on the tax return. (I switched that choice immediately, beginning that year.)

It seems the the Commonwealth had received ‘probable information’ that we had spent significant sums of money on merchandise for which we failed to pay sales and use taxes.

And, in the Commonwealth (this fact is true for much of the US jurisdictions), state denizens are required to pay sales taxes on items that we bring into our homes. Regardless of whether the state where we purchased the items had a sales tax- or if we deliberately had the items shipped to our homes to avoid paying the local sales taxes.  (The states generally don’t hound their citizens if they bought something for $ 100 or so like that.  But, think how often you pay sales taxes for that car you buy out of state- ALWAYS! Or, you can’t get it registered.)

Now, the Commonwealth was seeking some $ 6500 (including penalties and interest) on those pieces purchased in North Carolina. The key word there is NOW. Or, they would remove that sum from any account with either of our names attached to them. Unless, of course, we could provide proof that we paid sales tax on those items in North Carolina.

Yeah, right.

Given that introduction, many of you know that the Federal Government (now that Amazon has capitulated) has been [or not, as the case may be more properly stated, since this proposed legislation is at least 3 years old now]) discussing the clearly misnamed “Marketplace Fairness Act”. Which basically means if you operate a business and sell to anyone on the web, you are required to collect appropriate sales taxes and remit it to the proper authority. (OK. For smaller firms, it will be somewhat less cumbersome, in that only a specific sum for a given state need be computed.)

And, if Congress continues to fail to act (sorry for that construct- but it clearly communicates the failure of these bodies to act responsibly for almost every required piece of legislation necessary to run our country effectively), you can bet that something will still happen. And, that will be the SCOTUS- the Supreme Court of the United States. And, I’m pretty sure the obtaining decision that favored Quill over North Dakota will bite the dust.

Moreover, the states are fed up with the failure of the federal government to solve their problem. And, now, given the fact that it’s new fiscal year time, a slew of new laws or interpretations are bound to complicate matters for web-based (or web-enabled) businesses.

So, if you operate in (or sell in) any of the above states, now is the time to review if you need to change the way you sell. Because you may find yourself having a fairly big tax bill to pay.

Caveat venditor!

Share this: