{ News: Internet Sales Tax Collection }

PSG working to help clients understand impact of landmark court decision

June 26, 2018 (Youngstown, Ohio) - Like its clients, Phoenix Systems Group has been following closely the Supreme Court decision issued June 21, 2018, in the SOUTH DAKOTA v. WAYFAIR., ET AL. case.

 Challenge As online sellers are all too aware, the Supreme Court ruled in favor of South Dakota. This ruling was perhaps the worst-case scenario as it appears to grant broad powers to the states to force out-of-state merchants to collect and report sales taxes.

The full text of the decision is available on the Supreme Court of the United States website as a PDF file that you may view or download View Court Decision .

This ruling overturned the previous Quill from 1992 that based nexus upon a "physical presence" in the state. The court ruled last week that the previous decision was incorrect.

 Opportunity "Phoenix Systems Group is in the process of researching the impact of this decision upon its clients and identifying potential solutions," said Jeffery G. White, Phoenix Systems Group President. He noted that most of the states (which have sales taxes) will move to create new legislation (or enforce existing legislation) in the coming months. Currently, 16 states already have such laws in place or set to take effect by Jan. 1, 2019, according to Internet Retailer.

Over the next three weeks, PSG staff will be attending several educational events that will be discussing this ruling and examining the impact on out-of-state merchants. "We are also investigating partnerships with several tax software companies that provide tax collection and reporting solutions," White added.

 Solution There are potentially more than 10,000 tax jurisdictions in the United States that online retailers may be required to report to. "Because of this complexity, it’s necessary for us to develop a solution with one or more third party service providers that specialize in sale tax collection and reporting." White explained.

 Results Unfortunately, this decision places a tremendous burden upon small to medium size merchants. Nevertheless, Phoenix Systems Group is committed to providing a cost-effective solution.

PSG will provide another update to all clients in approximately 2 weeks.