New Use Tax Reporting Obligations for Remote Sellers

By Shane Ratigan, JD, LLM

Retailers making sales in other states (aka, remote sellers) have new use tax reporting obligations in some states where they are not obligated to collect sales taxes.

Several states have new rules impacting remote sellers, including requirements that remote sellers must report to customers when use tax is due on a sale.  Remote sellers are required to report the same information to state revenue authorities in most cases.

Since Colorado successfully issued and defended its use tax reporting rules in 2016, other states are embracing similar use tax reporting regimes. In addition to the states in the table below, at least four other states proposed use tax reporting rules in 2017 but have not implemented them yet.

Why the Urgency?

The states are eager to increase collections of sales and use taxes on sales made inside their borders.  One way is to obligate remote sellers that don’t collect sales taxes to provide notice of use tax requirements to customers and provide customer sales data to state revenue authorities.  These rules are being challenged by taxpayers and, in some cases, the states have not yet issued any guidance on the new requirements.  Nonetheless, the rules are effective at this time and violations may carry significant monetary penalties.

Questions? 

Contact Clark Nuber’s State and Local tax team to discuss how these new rules impact your retail operations and how to prepare.

© Clark Nuber PS and Developing News, 2018. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Clark Nuber PS and Developing News with appropriate and specific direction to the original content.

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