Tuesday, September 11, 2018

Sales Tax - Now It's Horribly Complex

Sometimes in my highly organized life, confusion reigns. Yes - all of us experience it now and again. Those times when we look at something and realize that it's just not enough - the cupboard needs a good clean-out, the room needs reorganization, or time deadlines that have been set up just aren't going to work. I'm diving into OOPS territory right now both at work and at home, and I've got to get myself into gear, focus, and streamline things that I can to make things work correctly. 

It should be easy for anyone to buy and sell an item. Suddenly
it's becoming quicksand for retail. 

My major bug-a-boo right now is sales tax. I'm sure all of you pay some sort of sales tax - whether it's an add-on at the point-of-sale, a small amount of extra money that goes to the city or state or nation as our "gift" unto Caesar. Carrying sales tax down the line, taxes are assessed on a statewide basis with smaller amounts for counties and even for cities. Normally this isn't a problem - cash registers are set up with a percent, it automatically gets added to items appropriate for taxation, the customer hands over the cash or credit card, and all is good. They get the product, and I get the monthly headache of filing taxes. 

Mail order used to be simple, but it's suddenly
going to get VERY complex. 

You may not have heard about the latest, however. In the USA, recognizing that dollars passing through states without sales taxes meant a loss of revenue (well duh!), someone took someone else to court and now all of us - large to small - have to assess and pay sales tax on every sale no matter what. I, like many retailers, have an on-line mail order arm of my store. I'm seriously considering knocking it out, effective almost immediately. I don't get a lot of income from it, but now, just to make things truly horrid, I have to tax each sale no matter what. That wouldn't be horrid, except now I'm going to be required to tax based on their residence, not my own state's rate ... well, let's just say this. ARGH!!!!!

If my hair wasn't already grey, this might just turn
it that color. I'm hoping I'm misinterpreting some
aspects of the new law. I have to have it in
place by October 1st, and I'd better understand it
by then. 

In essence, just for my state, my tax is based on one of more than 25,000 individual city tax rates, all of which can be "...conveniently looked up" on a PDF form or in a link that I might be able to access from my smartphone at the point of sale. Not only that - but my interpretation is that I need to charge the appropriate sales tax for where my customers live - not where the sale is taking place. So, if Rosemary from Roseville and Albert from Albertville are in the store buying a few beads, I'm supposed to charge each of them differently because they have different tax rates, and then I'm supposed to file my sales tax reports based on those differing amounts so that each city gets their piece of the pie. 

If sales are dominated by a single vendor, what
happens to our variety of available products? 

I'm hoping that I'm misinterpreting this, but yesterday's email from the state Department of Revenue was confusing, to say the least. If I'm right, though, then the law may have finally succeeded in driving all of the mom-and-pop stores out of business and leaving the ocean empty except for the sharks like Amazon. If that's the case, it will be a terrible shame because we'll lose some serious marketplace diversity. 

In any case, have a great Tuesday and I'll be back tomorrow, perhaps with a greater understanding of the new sales tax system ... or not. 

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