Sales during the 2019 holiday season are expected to be robust, especially as an increasing number of shoppers turn to the World Wide Web to complete their purchases. Keep in mind, though, that a new remote sales tax is now something that both buyers and sellers must contend with when doing business online, according to leading tax audit defense firm TaxAudit.
According to research, online sales for the 2019 holiday period are slated to reach $162 billion to nearly $167 billion—a whopping $20 billion higher than last year. This paints a positive picture of America’s economic landscape toward the end of 2019. However, amid the celebration, there may be some grumbling among sellers and buyers in light of the fact that many out-of-state sellers are now responsible for collecting and remitting sales tax.
Back in 2018, a total of 20 states made the collection and remitting of sales tax mandatory for specific remote sellers. However, now, a whopping 42 states have this requirement. The only states that require no sales tax for remote transactions are the ones that don’t have sales tax at all: Oregon, New Hampshire, Montana, Delaware, and Alaska. Missouri, Louisiana, and Florida also lack this sales tax requirement.
Note that in the majority of states, the remote sales tax requirement exists only if sellers surpass certain thresholds that the states set. As an example, the threshold in Virginia is $100,000 or a total of 200 transactions during the calendar year. As a result, small retailers aren’t affected much by this requirement.
However, larger retailers can easily come close to surpassing this threshold, especially during the bustling holiday season, so they have no choice but to keep close tabs on their sales. A tax expert can help both buyers and sellers to fully understand how the remote sales tax requirement affects them in their particular states this holiday season.