eCommerce in 2013
Buying on the internet has been around since the middle 90’s. Back then, there were just a few vendors offering items, and security was not real good.
Today, there are literally thousands of vendors on the internet selling a multitude of products. But, times are changing. We’ve had many breaches of security causing credit card numbers and personal information to be lost to hackers. We’ve had fraud from unscrupulous vendors. There have been growing pains.
Now, with the economy flat and city, state and the federal governments running up debts, there is a greater push to tap into the lucrative eCommerce world to generate funds. Many transactions conducted on the internet are tax-free (at least at purchase time – many jurisdictions have a “Use Tax” whereby you are supposed to pay local taxes on your own). But that is starting to change. States are pushing to start having vendors collect sales tax, even if they do not have a physical “Nexus” (presence) in the state.
There are over 8900 taxing jurisdictions in the United States. From city/town/township to county and finally state jurisdictions. For an internet vendor to try and keep track of the ever-changing world of sales tax laws is nearly impossible. There are vendors available that can handle this business (ADP, Avalara come to mind) and help vendors manager their tax calculations. But this is an added cost to the business.
It is very important that we continue to monitor what is going on at all levels of government to make sure we are complying with all laws. Laws are changing quickly and we, as business owners, have to adjust to the changing climate.
Contact us to see how we can help you navigate this ever-changing world.