Washington state has come out with new information regarding the transitioning of e-commerce websites to a destination based sales tax
system. They admit what everyone has known all along in that online sellers face unique challenges in implementing the new sales tax
methods. Here is a quote directly from dor.wa.gov:
"The Department of Revenue recognizes that sellers using online shopping carts face unique challenges to change to
destination-based sales tax. Some shopping carts have limited capabilities in calculating sales tax. For example,
some will only accept one tax rate per state; others apply tax rates only using a 5-digit ZIP code. As you may know,
Washington has about 16 different sales tax rates within multiple taxing jurisdictions (about 355) and 5-digit ZIP
codes do not accurately correspond with tax rates or taxing jurisdictions.
It is ideal if the shopping cart can use the actual delivery address or the corresponding ZIP+4 code, either of which
will deliver an accurate tax rate and taxing jurisdiction. However, that is not available to many sellers at this time."
Read more...
Yep. Its a total pain in the butt. Lots of us are running our online shops, and we don't do big business like the Amazons or Wal-Marts of the world.
We are simply trying to supplement our incomes, especially with inflation on the rise and the price of energy so high these days, so what are we
supposed to do when our state government comes along and tells us we have to implement a new type of sales tax collection system that no single
human being could possibly hope to understand?
Stepping off the pulpit for a moment, take a look at the destination tax system here. You'll
need to put something in the shopping cart and proceed to the checkout area to be able to enter an address and get a tax rate (use a valid Washington State
address), but no information will be collected on the site when you do so.
Pretty seamless? It even looks up your 4-digit zip code based on the street address your customer enters. The system that does this is pretty simple, and
easy to implement. For those of you running small online stores, this translates to a much lower cost to get your destination tax system rolling. Want to find out more?
Email me at info@destinationtax.com or get a price quote.
Also, please be sure to read the note below regarding assistance for small businesses. It can make implementing destination tax free!
Assistance for Small Businesses
Please note, small businesses that incur costs in changing to a destination-based system may qualify for up to $1,000 in tax credits
to help offset these costs. Alternatively, they may qualify to receive up to two years of subsidized CSP service. To qualify, a
business must have less than $500,000 gross income from Washington sales in 2008, at least 5% of taxable sales income from deliveries,
and at least 1% of taxable sales income from deliveries outside the primary taxing jurisdiction.
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