Who is on first, sales tax is on second...
…and nobody knows what is on third. The Abbot and Costello skit was made well before e-commerce arrived, but its focus on confusion is an apt parallel to the current state of sales tax nexus in this country. With states losing between $2B and $20B annually to lost sales tax revenue from remote commerce, there is tremendous incentive to find the home run solution.
As the video below highlights, several nexus expansion approaches have been pitched to help states recover those lost revenues—affiliate, click-through and economic nexus concepts have seen various levels of adoption among the states. A federal solution, such as the Marketplace Fairness Act has yet to gain serious traction in Congress. Ultimately, online retailers and other remote sellers are hard-pressed to keep up with the dynamic field of new nexus provisions.
Faced with such uncertainty, what can you do to minimize the risk of non-compliance and remain competitive with a consumer base that is conditioned to look for the low-cost option? Unfortunately, there is no easy out. However, investing in sales tax automation and regularly reviewing your remote sales in context of the current state tax law can help you stay on top of your game.
Bookmark our online and remote seller sales tax resource center for the latest updates.