Presentation for the 2014 Miva Merchant Conference. We discuss what brought us to where we are, the current state of online sales tax including Streamlined Sales Tax Project (SSTP), and what's on the horizon, especially the Marketplace Fairness Act.

1. Online Sales Tax in 2014
Susan Petracco, AccurateTax.com

2. Online Sales Tax in 2014
How to Prepare Your Business for
Sales Tax

3. Agenda
• A Brief History of Sales Tax
• Where Sales Tax is now, and where it’s going?
• Retailers and sales tax laws – what’s applicable
for my store?
• Q&A

4. What do things look like
today?

5. Sales Tax – The Basics
• Definitions
– Sales versus Use Tax – who’s responsible
– Nexus
– Sourcing Rules…
– Custom Tax Rules

6. Sales Tax – Sourcing Map

7. Sales Tax – The Basics
• Definitions
– Sales versus Use Tax – who’s responsible
– Nexus
– Sourcing Rules…
– Custom Tax Rules

8. Sales Tax – The Basics
• Questions you need to answer:
– What do I sell?
– Where do I sell it from?
– How do I sell it?

9. A Brief History of (Internet) Sales Tax
• Quill v. North Dakota
• Misconception that internet sales are really tax
free…
• The perceived lack of online sales tax was a
driving force for e-commerce
• The cost of not requiring retailers to collect online
sales tax has made this an economic issue for
states

10. Sales Tax – Today’s Landscape
• Thousands of taxing jurisdictions across the US
• Limited centralized processes for managing sales tax
• Many states still have little capability to enforce their
own rules
• Audits are more about getting the big fish, but smaller
retailers are being looked at more frequently now as
well
• Compliance is a moving target

11. Sales Tax Lifecycle
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Assessment of location
Determination of products
Calculation
Collection
Reporting
Remittance

12. What else is out there today?
Streamlined Sales Tax Project
• What is SSTP?
– Conforming states, non-conforming states, and associate members
– Sourcing Rules, Taxability Matrix Charts, Reporting/Remittance
• How does this affect me as a retailer?
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At this point it’s voluntary
Volunteer versus non-volunteer sellers
Free software
Relief from Liability
• Streamlined doesn’t necessarily mean simple

13. Streamlined Sales Tax Project (by the Map)

14. Should You Consider SSTP Now?
• What you commit to
• What you get in return
• Is it worth it now? Or in the future?

15. How Does this Affect
My Company’s Sales Tax?

16. How Hard is it to Calculate Sales Tax?
• In certain states and for some businesses, it’s
simple.
• Destination v. origin sourcing
• Nexus and collecting for multiple states
• Product tax classing
• Gotchas: Tax holidays, thresholds

17. Addressing My Store’s Needs
• Nexus Determination
• Assess your tax liability, review it as often as
changes occur
• Trust your CPA, but verify
• Find a software solution that supports YOUR
needs

18. Sales Tax and Miva Merchant
• Built-in Miva modules
• Third party modules or DIY, and managing the
data
• SaaS solutions
– Third Party Providers vs. Certified Service Providers
• Find the right solution for the problem you have

19. As Your Tax Burden Grows…
• Signing up in multiple states
• Remitting across multiple systems
• Calculating the correct amount to remit –
sales, partial shipments, cancellations, returns
• Handling tax-exempt customers

20. Where are We Headed with
Sales Tax Beyond 2014?

21. Marketplace Fairness Act
– Marketplace Fairness Act (MFA): What is it?
– A history of past legislation
– Separating fact from fiction
• Where the bill currently stands
• Small seller exemption

22. Marketplace Fairness Act
– What are the chances of this passing?
– If it passes?
• States joining SSTP vs. building their own solution
• Compliance dates (90-180 days)
• Solutions for Retailers
– DIY vs. Third-Party Provider
– Certified Service Providers

23. SSTP and MFA, Together
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SSTP is likely to become a bigger player
SSTP already has a model in place
Taxability Matrix Definition and Reporting Processes
Boundary/Rate File management process
Certification Process for States and Vendors
Group of existing Certified Service Providers (CSPs)

24. Preparing for What Comes Next
• Seek advice from your CPA or tax consultant
sooner rather than later
• Stay informed about the status of Marketplace
Fairness
• Monitor state legislation, including those that
affect your nexus
• Determine options for calculating online sales tax
(both software and data)

25. SMB Pain in an MFA World
• Small Seller Exception removes a great deal of
concern (if it stays)
• Choosing a Vendor
– Integrates with your shopping cart
– Fits your budget
– Provides the tools you need
(reports, remittances, exemption, etc)

26. Q&A
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