![]() ![]() Secondly, identifying trends early and accurately allow businesses an early warning indicator of what to expect next. Now, these ideas of a new and improved regime for sales and use tax are taking shape as: trends develop from the ideas of economic nexus, some states consciously follow neighboring or similarly situated states, groups of states trying to solve the same problem independently or even working together to find a solution this latter scenario is playing out with the successes of the Streamline Sales and Use Tax Agreement (SSUTA). Likewise, these ideas for change are not created in isolation but rather are influenced by older laws and the lessons learned from them as is seen in the similarities of economic nexus and marketplace facilitation with various aspects of affiliate and click-through nexus. ![]() As ideas spread to promote one policy or another, they can take on a life of their own as they build their own momentum through early successes. Changes will undoubtedly continue to roll out at a quickened pace as ideas for supposed simplification percolate in the minds of legislatures, but this uncertainty can be managed with a basic understanding of the trends that are unfolding in great nexodus.įirstly, all the changes with nexus do not take place in a vacuum of empty space. With the continuing uncertainty of change, one state, which repealed older nexus types, quickly reversed course and re-enacted legislation for affiliate and click-through nexus. However, in usual fashion, the states have muddied the water as new laws are enacted and then changed and changed again to meet practical needs and Constitutional requirements. States have readily jumped on the economic nexus bandwagon to greater tax revenue while at the same time dropping more complicated and expensive nexus categories. FLORIDA ECONOMIX NEXUS LAW FULLA survey of the full sales tax landscape reveals that while economic nexus is king, a groundswell of change is occurring with nexus types of click-through nexus and affiliate nexus as well as notice and reporting requirements for remote sellers. Businesses, in seeking to get their hands around economic nexus and strategizing to minimize tax liabilities and responsibilities, should take a step back to look at the forest of sales and use tax changes that continues to grow by the day. Please contact your GBQ State & Local Tax representative for more information.While economic nexus stole the nexus crown from physical presence, other nexus types are still in play even as the great nexodus unravels in state legislative houses. With the passage of this legislation in Florida, Missouri remains the lone state that imposes a sales tax that does not have an economic nexus standard. According to many estimates, economic nexus is expected to create more than $1 billion annually in additional tax revenue to Florida. While previous attempts at passing economic nexus legislation failed, Florida may have been motivated by the worldwide pandemic to utilize economic nexus as a way to boost state tax revenues. Florida’s law does not include such a provision. The majority of the states that provide for a transactional threshold have settled on 200 transactions as the determinant to establish economic nexus. Furthermore, many states include “and/or” language in their Wayfair guidance to also make relevant the number of transactions for economic nexus purposes. While Florida’s $100,000 nexus threshold is similar to the standard established by a number of states, it is important to note that the standard is only measured by taxable sales. Wayfair, Inc., economic presence has become the nexus standard for which businesses must analyze on a state-by-state basis. Kickstarted by the landmark 2018 United States Supreme Court decision, South Dakota v. In addition, retailers must also collect the discretionary sales surtax if making taxable sales into counties imposing the additional surtax. The rate at which remote sellers and marketplace facilitators must collect the state sales tax is 6%. Once the taxable receipts threshold is achieved, retailers are expected to register to collect and remit tax immediately. ![]() Forensic Accounting/Fraud Investigationsįlorida Senate Bill 50 was officially signed into law on April 19, 2021, requiring remote sellers and marketplace facilitators with taxable receipts over $100,000 in the previous calendar year to register for sales tax in Florida effective July 1, 2021.Financial Statement Attestation Services. ![]()
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