Quill Is Overturned: Why You Shouldn’t Wait to Respond
Sometimes you want to wait for the dust to settle before making a decision. Nobody likes acting on assumptions or fragments of information, especially when those decisions directly impact your business. It might seem like common sense to wait for the flurry of legal changes and court cases that will be sure to follow South Dakota vs. Wayfair.
There’s enough certainty with the end of Quill, however, to know that you need to start making changes now.
States will collect sales tax
The Supreme Court overturned Quill. There’s no speculating here. While plenty of details will eventually need to be ironed out, the end of Quill means that states can collect sales tax from online retailers without physical presence in their state. Since states are in the position to collect billions of dollars in revenue, they most certainly will.
A lot of questions still remain. The Supreme Court didn’t give any specific guidelines for the new state laws requiring online sellers to collect sales tax. They said those laws couldn’t place an “undue burden” on out of state sellers or discriminate against them — those requirements are based on the Constitution — but they don’t say exactly what that means.
Many states already had post-Quill laws ready before the decision, and many have already gone to court with them. Several states have said that online sellers have to collect sales tax if they sell as little as $10,000 a year in their state. Not all states have said they won’t require retroactive compliance. Remote sellers can’t just assume that they won’t be affected.
Sometimes surprises aren’t really surprises. When ominous music starts playing and the disposable character starts walking down a dark corridor in a horror movie, you know that something bad is about to happen. You don’t want to be surprised at tax time next year by a bill for sales tax on transactions you made in 2017… for which you didn’t collect sales tax.
If you know that your company is affected – or could be affected – by the end of Quill, you should make changes now.
Make hay while the sun is shining
You want to be proactive rather than reactive. In other words, don’t wait until you have a problem to make changes.
There will inevitably be a slew of court cases and legal changes before the everything surrounding Quill is certain. Waiting until the air clears only ensures that you will fall behind.
You don’t need to panic, though. We’re hearing online sellers plan to give up and shut down right away. We’re also hearing some wild speculations about how much automated software solutions will cost.
Your business relies on accurate planning. Knowing your actual sales tax compliance responsibility and the cost of compliance allows you to make realistic plans. Sales Tax DataLINK has web-based services that will keep you up to date through all the changes. Let us show you — with your own data — how simple our right-size solutions can be.
The Wayfair decision Four years ago, the Supreme Court's decision in South Dakota vs. Wayfair changed everything about sales tax compliance for businesses with revenue from multiple states. Instead of being responsible only for transactions in states...
The new nexus Before the Supreme Court's decision in South Dakota vs. Wayfair, remote sellers only had to collect sales tax when they had a physical presence in a jurisdiction. A store, a warehouse full of your products, affiliate sellers -- these...
a The Barter Life It used to be that businesses only had to collect and file sales taxes if they had a physical presence in a state: an office, a store, a warehouse, or a factory, for example. A small business using e-commerce to sell in other states or...