- Sales Tax Trash Talk
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- Good news & bad news
Good news & bad news
Rohit Bhadange
June 25, 2023
Hello trash enthusiasts - welcome back.
I want to thank you all for the support, feedback, and the surprising number of responses to the Oprah meme from last week. Didn’t realize there was an overlap in sales tax and Oprah fans…
I can’t promise to top the meme charts again, but let’s see what bites we have in today’s trash:
Grocery taxes changing (again) 😣
Amazon sellers - beware of two things 🚨
Incorrectly taxing toilet paper led a class-action lawsuit ⚖️
Meme of the week 😎
Q from you - “I accidentally registered everywhere” 🙋♀️
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Good news & bad news 🙃
Bad first… on June 30 (aka next Saturday), Illinois’s grocery tax suspension will end, so beginning July 1, retailers need to resume collecting sales tax on groceries at the reduced 1% rate.
Now for the good news…
From August 1 to October 31, Tennessee is offering a grocery sales tax holiday for food and food ingredients. Time to stock up before the winter!
On September 1, Alabama is reducing the state sales tax on groceries from 4% to 3% (separate from the local sales tax). This rate could be reduced to 2% next year… but let’s just focus on today. It’s complex enough.
That leaves 12 states where groceries are charged the general state sales tax rate or a reduced rate.
Amazon Seller Misconception 🚨
We have been supporting a lot of Amazon & marketplace sellers, and I want to clear up a common misconception about sales tax.
It is true that Amazon collects & remits sales tax for you, BUT you still have 2 major responsibilities:
🔑 When you file in each state, you need to report your total Gross Sales including your Marketplace Sales… even though they are considered “exempt”
🔑 There are 26 states where your Marketplace sales COUNT towards your Economic Nexus thresholds.
Now if you’re using Amazon FBA… that opens up a whole other can of worms. I’ll cover that next time.
Toilet paper led class-action
NJ and PA are the 2 states in the US that exempt TP from sales tax. Businesses have missed this detail and gotten into legal trouble 🤯
In 2015, a couple went on a shopping spree buying toilet paper in NJ
(didn’t know anyone did this pre-2020, I’m still trying to figure out the motive)
…and claimed they were wrongfully charged sales tax, so then filed a class action lawsuit (eventually dismissed).
In 2007, a woman in PA actually won $100 from a 28-cent TP sales tax mistake!
😎 Meme of the Week 😎
Send us a meme - best one will be featured next week
🌟 Partner Spotlight 🌟
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Interested? Just reply to this email and I can make an intro.
🙋♀️ You ask, we answer 🙋♂️
Q (Annie): I already registered everywhere when we started. What do I do if we haven’t met the nexus requirements in most states?
A: Two options…
(a) States won’t penalize you for voluntary registration (of course). You can continue collecting & filing sales tax in all states; OR
(b) Cancel your sales tax permit in states where the cancellation complies with state-specific guidelines. Some states may dispute your ability to cancel the permit to avoid losing revenue.
Struggling with Sales Tax?
Our team of sales tax experts will answer all your questions and address any concerns for free.
Let’s free you from sales tax.
Thank you for reading along. I’ll be back next Sunday with more sales tax shenanigans.
If you enjoyed this one, please share it with your network. 🤝
If you caught a laugh, reply back and let me know. I live for the people.
If you have any feedback, suggestions or questions, please let me know by responding to this email or DM me on Twitter or LinkedIn.
Until next week’s 🗑 …
Rohit