When online sales tax laws in Colorado and Connecticut take effect on Saturday, 24 states will have sales tax collection statutes and regulations that require online retailers to collect sales tax on online orders even if they do not have a physical presence in that state.
The Colorado law requires online retailers that do not have a physical presence in the states to collect sales tax if they generate more than $100,000 of gross sales or services and at least 200 transactions annually in the state.
The Connecticut law requires online retailers that do not have a physical presence in their states to collect sales tax if they generate more than $250,000 in revenue and 200 transactions annually in the state. The Connecticut law also excludes several items from taxation, including child car seats and safety equipment such as bike helmets. And, on the third Sunday in August until the following Saturday, it will not require retailers to collect sales tax on clothing and footwear sales that are less than $100.
Connecticut Gov. Dannel Malloy signed the online sales tax law into effect on June 14. Exactly one week later, the U.S. Supreme Court issued its ruling in the South Dakota v. Wayfair Inc. case that, for the first time, allowed states and local governments to require online retailers to collect sales tax even if they don’t have a physical presence, or nexus, in the state or local tax jurisdiction.
In putting new online sales tax laws into effect, the states are reclaiming their authority over sales tax collection, says Jason Brewer, executive vice president, communications and state affairs at the Retail Industry Leaders Association. “States, in their own way, are implementing either via regulation or statute what they need to promote or compel sellers to comply,” he says.
Read about how e-retailers are navigating the hodgepodge of state laws and regulations in Internet Retailer’s October issue cover story, “The Supreme Court overturned Quill. Now what?” or listen to an Internet Retailer webinar on the topic here. You can find additional resources and research available here.Favorite