As a small business, this is frightening. While South Dakota law has $100K threshold before requirement to collect taxes, will other states?
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According to what I’ve read in another article, there probably will be legal pressure on other states to keep their laws simple like South Dakota’s and not be a burden on interstate commerce.
As a small business, this is frightening. While South Dakota law has $100K threshold before requirement to collect taxes, will other states?”””
As a bookkeeper for many small businesses over the past 38 years, I need a clarification on this S Dakota law.
Are they saying that is you are small enough-—under $100K in gross annual sales, you do not have to collect any sales taxes?..........
OR are they saying that if you are over $100K in sales-—a fact that you know on Jan 1 each year, you must collect sales taxes on everything ????...........
OR-—Are they saying that if you are more successful than you think, you can skip the taxes on the FIRST $100K in sales, and only collect taxes on everything above that? ......
OR.... IF you go over the $100K in sales, you now owe for all the year’s gross sales & attached sales tax, and IF you didn’t collect that tax from your first $100K in customers, you now have to pay it out of the company profits?
Perhaps S Dakota has you make a declaration at the beginning of each year, and if you become really successful, the next year’s declaration will place you into the ‘collect sales taxes’ category???
The devil is in the details, people.
Also, the questions about having to collect taxes for both ends of the sale can really hammer this ruling.
Before any implementation of this ruling can be put into place, these questions have to be cleared up.
Again-—glad I no longer have clients who have a sales tax status.