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Happy August, trash talkers.

I don’t know about you, but I’ve been thoroughly enjoying the Olympics this summer.

Watching athletes compete at the height of their careers has really got me thinking about sales tax (sigh, seriously?). 🥇

Hear me out. Sales tax compliance is extremely complicated and technical. Getting it right is practically an Olympic sport.

But I digress. Check out this month’s (1) sales tax updates (2) what you need to know about home rule sales tax and (3) a Q&A below.

SALES TAX NEWS

1️⃣ Under a class action case in Florida, a customer claimed that Uber illegally collects sales tax on food delivery fees.

2️⃣ Ohio is expanding their sales tax holiday, running from July 30, 2024, through August 8, 2024. This year, the holiday will apply to all tangible personal property priced at $500 or less.

3️⃣ Wayfair LLC (yes, the company from the landmark 2018 ruling that created the standards for economic nexus), has filed suit in Colorado to challenge the nexus standards of the state and its home rule cities.

4️⃣ New Jersey has announced the repeal of their annual sales tax holiday for retail sales of computers, school supplies, instructional materials, and sports or recreational equipment.

5️⃣ A midyear sales tax report revealed that the five states with the highest average combined state and local sales tax rates are: Louisiana (9.565%), Tennessee (9.556%), Arkansas (9.47%), Washington (9.45%), and Alabama (9.29%).

6️⃣ A recently proposed Nebraska property tax relief plan would involve a two-tiered sales tax. The sales tax base would cover an additional $16 billion in currently exempt transactions, most of which were exempted to avoid double taxation.

7️⃣ Legislators in some states have looked to retail delivery fees from services such as Amazon Delivey, Uber Eats, and DoorDash to alleviate their transportation budgets. Pioneered by Colorado in 2022, Minnesota will implement one in July 2024, with Washington State considering a similar measure.

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WHAT IS HOME RULE SALES TAX? 🏡

As if sales tax wasn’t complicated enough, meet home rule.

Home rule refers to states where local counties and cities administer sales tax. Home rule jurisdictions have their own requirements, forms, and due dates.

So, how does this impact companies?

Many sales tax providers charge a per-filing fee. If you’re filing sales tax in these states with them, the fees add up quickly.

For example, along with the state-administered return, Colorado has 63 home rule jurisdictions. Assuming a monthly filing schedule, 63 x 12 = 756 returns per year! That’s a lot of extra filing costs…

This means that the sales tax liability amounts being filed are sometimes less than the actual cost your sales tax provider charges you for the per-filing fee.

Make that make sense.

Learn more about home rule sales tax →

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YOUR QUESTIONS, ANSWERED!

Q (Ravi): Do I have to participate in all sales tax holidays?

A: In some states, sales tax holidays are mandatory but other states allow retailers to opt-in or out. Most states won’t penalize you for giving them more money.

However, it’s worth considering that you could potentially lose customers to competitors who are honoring the sales tax holiday, which can have other long term ramifications.

More info on sales tax holidays →

Thanks for reading along.

I’ll be back next month with more sales tax shenanigans.

If you enjoyed this one, please share it with your network. 🤝

If you found it helpful, 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 time’s 🗑 …

Rohit & the Zamp team