Remote Retailers and Sales Tax: Beware of the MTC!
I reported in an earlier post on August 9, 2010, that the Multistate Tax Commission (MTC) was in the beginning stages of creating a Model Sales and Use Tax Notice and Reporting statute which follows Colorado's and Oklahoma's recent legislation.
Now, the MTC has released a draft of the Model Act as they work their way through the process. The draft Act includes annual notice requirements to purchasers and the state. It also includes provisions for assessment of penalties for noncompliance.
The question remains as to whether these requirements are Constitutional. However, as the MTC works through this process, I would not be surprised to see other states adopt legislation similar to Colorado's or Oklahoma's.If you are a remote retailer and do not currently collect sales tax in multiple states, you may want to analyze your notice requirements and proactively prepare.
Brian Strahle is the owner of LEVERAGE SALT, LLC where he provides state and local tax technical services to accounting firms, law firms and tax research organizations across the United States. He also writes a weekly column in Tax Analysts State Tax Notes entitled, "The SALT Effect." For more info, visit his website: www.leveragestateandlocaltax.com
You can reach Brian at firstname.lastname@example.org.
Because state and local taxes are deceptively simple and endlessly complicated.