What’s the deal with sales and use tax on remote purchases?

Four primary approaches, one big discussion for remote sellers

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The internet has transformed the consumer products space over the past ten years and accelerated the trend toward remote purchasing. According to the U.S. Department of Commerce, e-commerce sales accounted for 5.8 percent of total 2013 sales, which represents a 16.9 percent increase over 2012. Businesses are adapting, and the once very expensive brick and mortar retail storefronts are becoming a necessity of the past.

This transformation in the retail space has sparked debate around the administration and collection of sales tax on remote purchases.

  • Are remote sellers required to collect and remit sales tax on purchases made by buyers in other states?
  • What is the responsibility of the government to create a level playing field for remote sellers?
  • Who is responsible for the accuracy of use tax compliance?
  • Will remote sales tax collection effectively turn all remote sellers into multistate entities?

In this white paper, our state and local tax professionals discuss the different ways states are attempting to use remote sales tax collection as a funding source to plug gaping budget holes.

We focus on the four approaches that are currently gaining momentum and attracting attention: the Marketplace Fairness Act, click-through nexus laws, comprehensive disclosure and the criminalization of individual use tax non-compliance. Remote sellers of all sizes should be aware of these approaches as decisions in each area have the potential to significantly impact business operations and tax compliance requirements.

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© 2014 McGladrey LLP. All Rights Reserved.

This publication represents the views of the author(s), and does not necessarily represent the views of McGladrey LLP. This publication does not constitute professional advice.


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