Hey guys, love the new addition to the site.
Any plans or thoughts on adding a marketplace type section where people can sell or hunt down books they’re looking for?
We are rolling out new features and a market place is being discussed. In the meantime if someone wants to start a marketplace topic I am ok with it.
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We need to look into it further. Opening up a marketplace where users can trade or sell brings up the legal questions and such. It’s something we need to really dig into first before opening it up. But I’d love to have a marketplace, but let us sort it out first.
You can very easily find yourself under the new Facilitator Laws required to collect, file and pay Sales Tax to 40 or more States. I’ve got a new update from a couple days ago I haven’t even had time to read myself yet and add the changes to the list.
Good Afternoon!
This month’s news updates highlight just how often sales tax professionals must update their administrative procedures to reflect sales tax legislative changes and rule updates. From new nexus legislation to updated VDA processes to new exemptions - you have to capture it all! We hope you find these sales tax updates informative and helpful in your day to day sales tax work.
May Sales Tax Updates:
Indiana Enacts Marketplace Nexus Legislation
Indiana has enacted legislation with marketplace nexus provisions, effective July 1, 2019.Mississippi Enacts Changes to Annual Back to School Sales Tax Holiday and Creates New Nonprofit Exemptions
New Mississippi legislation adds retail sales of school supplies under $100 to the sales tax holiday and creates exemptions for sales by certain non-profit organizations.Maryland Enacts Exemption for Commercial Building Cleaning Services
Effective April 30, 2019, Maryland sales and use tax does not apply to cleaning services for a commercial or industrial building owned by a common ownership community or a retirement community used for specified services.Illinois Amends Voluntary Disclosure Procedure
The Illinois Voluntary Disclosure Program will now be run through the Problems Resolution Division.Tariffs Included in Purchase Price in Wisconsin
Tariffs directly imposed on importers and passed on to customers are subject to Wisconsin sales and use tax as part of the purchase price.Idaho Enacts Economic and Marketplace Nexus Legislation – UPDATE
The Idaho State Tax Commission has issued additional guidance regarding the enacted economic and marketplace nexus legislation.South Carolina Finalizes Economic and Marketplace Nexus Ruling – UPDATE
South Carolina Governor Henry McMaster signed S.B. 214, which clarifies the existing sales tax collection obligations for marketplace facilitators, effective April 26, 2019.Don’t forget to check out our Remote Seller Nexus Chart and our Remote Seller Resources Page for the latest updates and proposed legislation across the states.
You can also visit our Economic Nexus State Guide for the details on each state’s economic nexus rules.
Is this something where if I post “Hey I’m looking for book X” and gave my email to Anthony and someone emails him and we then work something out by email, there are possible taxes involved? Am I reading that right?
Even those Direct Links you provide to TFAW every week may qualify you as a Marketplace checking the wording from the Indiana link above.
The legislation defines “marketplace” as a forum, whether physical or electronic, that a marketplace facilitator uses to connect sellers to purchasers for the purpose of making retail transactions involving a seller’s products – which includes tangible personal property, specified digital products, rooms, lodgings, or accommodations, and enumerated services – by means of any of the following:
- Listing, making available, or advertising products
That’s the headache!!! Each individual State is writing their own rules for what qualifies as what and how it’s applied. You end up have 40 answers to that question based on which State the buyer is in. You have to consult your tax professionals you deal with normally just to figure some of this nonsense out.
Those are affiliate marketing and we are following such rules setup by those merchants.
We are not selling anything directly from CHU. There’s a big difference in affiliate marketing and allowing people to use CHU websites as a trading post or buying from one another. CHU would not be selling anything directly and has not sold anything directly as of yet.
All these tax rules do not apply to the actual question. If we did open up trading or selling of goods between two parties, paying taxes is the responsibility of those parties involved.
The issue we need to look into is all the legal requirements by CHU to have the transactions basically initiated through our website(s). All it would take is one bad transaction and then we get looped in when all we did was put the parties in contact. That’s the sort of stuff we have to look into to protect CHU.
When you start talking Merchants and Selling of stuff, CHU would not be selling directly between parties.
I do know that here in Texas, one shop setup a comic book trade each month but if the trade led to any cash transactions, they were asked to make such transactions outside of the store or the store would be on the hook for sales taxes and other things that involved such transaction. It sounded like a hot mess.
I hope you have a loophole but it sure sounds like the wording as written is exactly what is happening and that’s just Indiana’s wording. CHU is an electronic forum and you are advertising the product and directly connecting buyers to the sellers listing for that product. It’s better to play it safe than to get in trouble later. I’m assuming it costs nothing to ask your tax professionals to have a look and be sure.
I would imagine if you weren’t directly connecting the two and just had a page for where people can check for “CHU preferred sources” for aquiring the items it wouldn’t even be a consideration and saves you a ton of time not tracking down the exact link each week.
In short, more than likely, yes. But that’s up to you and your local State and the IRS.
As for using CHU forums to setup trades or buys, that’s where we need to make sure CHU has the proper disclaimers, notices and anything else setup prior to protect CHU. We just put people in touch, beyond that we don’t want to be involved or dragged into any disputes that resulted from bad transactions.
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Through affiliates, it’s commission based. Any sales taxes by state would be done at the transaction level by the actual merchant.
The affiliates report earnings as 1099, so it’s almost like you’re a contractor for them. The sales taxes do not apply. Trust me, we’ve covered by the affiliate programs.
eBay does not actually sell anything, either … yet, they are collecting Sales Tax in some States cases …
Personally, I think there are plenty of venues with which to sell already out there …
Yeah, its likely due to the fact the sale is done on eBay so now with new laws from states they’re required to force sales tax, etc.
eBay isnt selling themselves but its like they’re inviting everyone into their home to sell goods. So this is why here at CHU, we need to check into this before we proceed.
The mention of us linking to TFAW and other affiliates is not the same. Ive already explained that we are already covered. Thats a completely different ballgame.
That’s the thing, your imo and my imo aren’t the one’s that matter. It’s whoever’s interpreting Indianas laws that matter and the other 40 or so States that have things worded in different ways have their own imo’s that matter.
For that matter I’m not sure what the functional difference between a post on CHU that has people commenting and a Facebook post I make that has people commenting that I boost and claim as an advertising expense. I expect the main difference is I’m advertising myself when the other’s advertising someone else’s goods and providing a direct one click approach to purchasing it.
I tend to err on the side of caution especially at times like these when the States are writing and rewording the definitions weekly. Why do the extra work just to potentially expose yourself to liability/licensing and headache tomorrow when there are simple work arounds?
I read the full Indiana new tax rule that you linked to and if you read it carefully, what we’re doing on CHU with affiliate links does not apply for us to collect sales tax for Indiana. Yes their wording is fuzzy but when you break down what they’re saying we do not have to collect sales tax for Indiana.
Also their new tax law states that you have to make either 200 transactions and or $100,000 in sales within Indiana if it did apply to us.
Taxes lol if you buy or trade or sell a book on here use the name Robert Pattinson as your selling and buying name and send the PayPal money as a gift.
I agree with that. But it does sound like it qualifies you as a “Marketplace” which opens up the door for potential other headaches depending on how Indiana and other States word things now and in the rewrites to come which can change things without you even knowing it. Be aware, be prepared. I’ve done my part by at least giving you a heads up that some things are sounding really close to what you’re already doing while you’re thinking about doing even more in the future.
I don’t want to accidently get caught in retroactively applied qualifications that even if they don’t force me to physically charge for sales may have me buying business licenses, filing stupid reports that say $0 and such just to stay legal. We changed the business last year from my X’s name to mine, I started collecting and filing Sales Tax in April, paid and filed the last of hers for March and just last week she’s in here because she can’t get her tax refund this year because the account wasn’t closed properly or something stupid. The lady on the phone takes care of it she said and 2 days later I now have a bill in my hand for $10 for her being late on a month she wasn’t even in business that she’d just talked to them on the phone about and thought was fixed that may delay her tax refund again. I’m going to pay it of course just to keep her out of more headaches.
You are speaking for yourself there, @BJ.
You may not like the truth but it is the truth. Take Media Mail for example. We all know it’s against postal regulations to ship comic books thru Media Mail. That is clearly written in the postal regulations.
about.usps.com/notices/not121/not121_tech.htm Media Mail packages may not contain advertising. Comic books do not meet this standard. Books may contain incidental announcements of other books and sound recordings may contain incidental announcements of other sound recordings. In accordance with standards in the Mailing Standards of the United States Postal Service, Domestic Mail Manual (DMM), Section 170, Media Mail packages must have a delivery address and the sender’s return address and are subject to inspection by the Postal Service™. Upon such inspection, matter not eligible for the Media Mail rate may be assessed at the proper price and sent to the recipient postage due, or the sender may be contacted for additional postage. For more information about Media Mail service, please visit www.usps.com or call 1-800-ASK-USPS (1-800-275-8777). Complete explanations of qualified items can be found in the DMM. PSN 7610-07-000-4037 Notice 121, October 2012
You may think it’s okay, I may think it’s okay, but if even ONE of the postal employees between dropping off and arrival choses, the package arrives at the customers door POSTAGE DUE for full rate Parcel Post or gets returned to sender voiding the money you just spent on Media Mail and delaying the customers receiving the items. When things are confusing and not completely and 100% CRYSTAL CLEAR in their wording, the IMO that matters is the person who is interpreting the laws and regulations. It’s kind of like driving drunk. Sure you can get home safely most nights. The ONE time you don’t it’s a disaster potentially.