In Alabama, rising pandemic-related online shopping has been a “life saver” for the state’s municipal governments and a “financial vaccine for Alabama’s counties,” the state said. The state’s SSUT has taken in more than $309 million overall during the current fiscal year – almost double the tax generated during all of fiscal 2018-19. The number of online retailers in the program has also grown from fewer than 200 in 2017 to more than 2,900 today.
Under the SSUT formula, 50 percent of all revenues from online sales from companies participating in the program go to the state. The legislation also expanded the program to allow out-of-state online sellers to join the SSUT even if they have an affiliate with a brick-and-mortar presence in Alabama.
The Decatur, Ala., city council was also recently set to vote on giving a quarter of online sales tax revenue to the city’s schools in 2021. (A portion of the funds must support child-related nonprofits.) The city expects to get about $2 million in 2020 and again in 2021 from online sales tax.
Idaho’s state tax revenues for August came in much higher than expected — $37 million higher, the second straight month of big overages — putting the state on track to end the current fiscal year with a giant surplus if current trends hold, even as it has cut budgets due to the economic impacts of COVID-19. The state’s largest categories of general fund tax revenue, individual and corporate incomes taxes and sales taxes, all rose in August. Sales taxes were up 8.2 percent over August 2019 – not even counting $9.6 million in the month’s taxes on online sales, which go into a different state tax fund.
The Illinois Department of Revenue (IDOR) recently announced expansion of its Audit Fast Track Resolution (FTR) Program to all sales and miscellaneous tax audits except for Motor Fuel Use Tax. The expansion of the FTR program to sales taxes comes as the IDOR braces for a wave of litigation regarding the state’s problematic new amendments to its marketplace facilitator law.
The newly expanded program could become an efficient method of settling some sales tax disputes, but disagreements involving the state’s amended marketplace facilitator law will ultimately need to be resolved by legislature or courts. Critics say the latter failed to account for local sales taxes in the state’s complex sales tax system.
The Texas comptroller confirms that salespersons in a local jurisdiction constitute state nexus for certain companies.
Out-of-state wineries must have a Texas use tax permit in order to make direct-to-consumer (DTC) sales into Texas. All registered out-of-state wineries must collect state sales and use tax, but until the recent changes to Texas sales tax laws and regulations, they’ve only needed to collect local sales and use tax in jurisdictions where they’ve had a physical presence in the last 12 months. According to the comptroller, a physical presence (or physical connection) includes sending salespersons into a jurisdiction or attending trade shows or similar events to solicit or promote sales.
Most remote sellers are permitted to collect a flat local tax rate – a much simpler option for remote sellers as there are more than 1,500 local jurisdictions in Texas. Unfortunately, this option isn’t available to marketplace providers collecting on behalf of marketplace sellers.
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