States continue to enact legislation or issue guidance in response to the U.S. Supreme Court’s decision in “South Dakota v. Wayfair, Inc.”
A rapidly increasing number of states are imposing the tax collection obligation on what is being termed “marketplace facilitators” or “marketplace providers.” This week’s report includes information from Colorado, Georgia, Indiana, and Kansas.
Both houses of the legislature passed House Bill 1240, and the bill has been prepared to be presented to the governor for action. The bill, if enacted, would require certain marketplace facilitators with Colorado sales exceeding $100,000 to begin collecting on October 1, 2019. The bill also codifies the Department of Revenue’s destination-based sourcing rules.
The Department of Revenue issued guidance (Policy Bulletin SUT-2019-02) under recently enacted House Bill 182 (legislation that eliminated the “collect or report” option available to certain remote sellers and reduced the dollar nexus threshold from over $250,000 in gross revenues from Georgia retail sales to $100,000 in gross revenues from retail sales). The elimination of the reporting option was effective April 28, 2019, and the lowering of the economic nexus threshold is effective January 1, 2020.
In addition to summarizing the new legislation, the guidance clarifies that remote sellers meeting the current law threshold of $250,000 in retail sales or 200 transactions that may have chosen to comply with the use tax notice and reporting requirements in 2019 can no longer continue to do so. These remote sellers have an obligation to begin collecting and remitting sales tax on taxable sales on or before July 1, 2019.
Indiana’s budget bill (House Bill 1001) signed on April 29, 2019, requires marketplace facilitators to collect and remit sales tax if: (1) their gross revenue from sales of tangible personal property or services (including lodging and accommodations) delivered into Indiana, or products transferred electronically into Indiana, exceeds $100,000; or (2) the marketplace has 200 or more separate transactions involving services, tangible personal property, or electronically transferred products for delivery into Indiana. These provisions are effective July 1, 2019.
House Bill 2033 is pending action by the governor. The bill includes economic nexus provisions for marketplace facilitators and remote sellers, if signed, would be effective October 1, 2019. The Kansas bill includes numerous other sales and income tax changes. The governor vetoed a similar bill earlier this year.
Read a May 2019 report prepared by KPMG LLP
© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.KPMG International Cooperative (“KPMG International”) is a Swiss entity.
Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.