The Million Dollar Question

The Marketplace Fairness Act (MFA) is gaining traction in Congress. It has already passed in the Senate and might soon pass in the House. While we’re still a long way off from the MFA becoming a reality for sales and use tax, it’s important to think about the changes in terms of your sales tax filing software and how it might affect your daily processes. For many companies, the MFA will drastically change the way they do business. For others, it’ll just be added work in already existing business practices. Either way, it comes down to the volume of online sales your company does. The MFA includes a $1 million dollar exclusion. In other words, if your company does less than that amount in remote sales, you won’t see any big changes in the way you do business because you won’t be affected by the new legislation.

While that might change in the future, small business owners who sell online or manufacturers who do a little e-commerce in addition to their wholesale business won’t have to worry about sales tax filing for e-commerce just yet. However, if all of your remote sales in any state combines to an amount over the threshold, you’ll be required to collect and files sales tax on your remote transactions. The merchants who will be most affected are those who meet these criteria: Your sales are over $1,000,000 per annum. All your sales are through e-commerce. You have never collected sales tax. If this describes your company, you should begin now to think about how you’ll deal with the new issue of sales tax collection. Does your current shopping cart include sales tax calculation features? If not, it’s time to prepare to make the technological changes you need to make to comply with new regulations. Once you figure out how to collect the sales tax, you still need to figure out how to file.

Filing sales and use tax returns, including when, where, and how it’s done, can be very different in each state. Often the specific rules that apply to you depend on the amount you sell in a given state. Sales tax filing software that automates the tasks for you will be your best friend if and when MFA passes and is enacted. Instead of panicking, take a look at your sales tax filing software if you already use sales tax software, and make sure it can handle an increase in the volume of transactions it might need to do if MFA becomes a reality. If you haven’t dealt with sales tax before,  “How to Select Sales Tax Software”  explore your options now so you’ll be ready. May we suggest that you let us show you just how SalesTaxDataLINK software works? We think that a “Web Demo” will be reassuring, and you can ask our experts all your questions.

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