When the pandemic first hit, state departments of revenue slowed their enforcement on things like collecting sales tax due from businesses. But now that governments have adjusted — for the most part — to having a largely remote workforce, expect that grace period to end, says “Departments of revenue also provided a grace period just to help businesses keep the lights on so they allowed a delay in the filing of returns,” she says. “But most of that has passed and it’s back to regular business.
As part of that rule-making process, small businesses were generally made exempt from complying. For example, if you own a maple syrup shop in Vermont and typically got a smattering of online orders every year totaling around $10,000 across 15 states, you wouldn’t have to remit a sales tax on those transactions. It’s not enough of an economic presence in any one state.
“Alongside that growth [for small businesses] there comes an obligation that comes to remit a sales tax,” says Armbruester. “That’s money due to states that they’re potentially not collecting and I think they’re going to target small businesses.”Even if you are familiar with the relatively new rules for charging sales tax online and think you’re exempt, the situation is rapidly changing.
For direct sellers, the annual threshold for most states was at or near $200,000 in sales to customers in-state and 200 transactions. At least a dozen states have changed their Wayfair threshold rules over the last year.Arizona’s is now $150,000 in saleGeorgia reduced its threshold to $100,000Tennessee reduced its threshold from $500,000 to $100,000. That went into effect this week on Oct. 1.