Comply or Fight? The Tax Threat from the States

State tax authorities have gone into hyper-aggressive enforcement mode against online merchants. States want merchants to collect in every state Amazon has a distribution center, but this is only the beginning. Collecting sales tax, in the state’s view, opens you up to other tax filing responsibilities such as income tax franchise tax, filing fees, even property tax in some states. The cost of complying all of these requirements in just 25 states could easily exceed $100,000 (USD). We expect states to continue to send audit letters, meaning the associated filing costs will increase. State governments hope that the Supreme Court case will pave the way to make more sellers comply regardless of physical presence. I’ll show you what you need to do.