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March 25th, 2009, 03:24 PM #1
Things Merchants need to do
- Join Date
- January 18th, 2005
1. Find out the addresses of their affiliates from the networks they are on
States (like NY) don't just have a State tax, they have local taxes. Merchants need to find out if they need to collect the local taxes in addition to the State tax, and this would require knowing what affiliates live in which tax districts, in addition to matching up that information with their sales delivery addresses.
Merchants need to know what states they need to start gathering information from in order to comply with the internet sales tax laws. They can't do that without at the very least the State and ZipCode that their affiliates live in AND have their business located in (if they are different, both locations constitute nexus)
2. Find out which of their products are subject to sales tax in which states.
Different items are taxed at different rates or not at all in some states and absolutely taxed in other. Some items also have times of the year when no sales tax is charged.
3. Approach their state legislators with the following information:
a. The tax laws need to be simplified if they expect small to medium sized businesses to be able to code their shopping carts, collect the appropriate taxes and do the necessary reporting to the states.
b. How can a company refute the existence of nexus? The laws for each state clearly say that the sales that create nexus are from affiliates in that state that are delivered in that state. What an accounting nightmare this is for probably 90% of the merchants that have affiliate programs! If the merchant can't figure this out, how will the government plan to do it? Ask your legislator.
c. Is the state in question prepared to make easy online reporting available, as well as tax tables coded for every shopping cart that is currently online so that merchants have the technical tools to add this information to their shopping carts and online ecommerce stores?
Merchants need to make it clear to the states that instead of collecting taxes in 15 states, they will close their affiliate programs and possibly their entire online businesses, which will lose the states jobs, income tax, the sales tax from the items that the people without income won't be able to purchase. The states don't understand the impact unless the people it will impact (merchants and affiliates) TELL the states exactly what will happen if they pass the laws without making changes to the tax codes to make them simpler to collect and remit taxes.
Merchants need to approach the states with step by step questions on how the State plans to assist the merchants with complying with these updated tax laws, maybe with this approach the legislators will take a minute to think about the number of people they are affecting adversely instead of the perceived dollars they stand to gain.
As Haiko has stated in other threads, this is coming, what we need to do is make sure that the merchants ARE ACTUALLY ABLE to comply and that the states realize that other changes need to be made to their tax codes to make this workable.
Feel free to add to this list.Deborah Carney
TeamLoxly.com BookGoodies.com ABCsPlus.com
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