The Changing Rules of E-commerce Taxation

posted in:
Tax

TaxComplianceIn the recent Supreme Court case, “Wayfair v. South Dakota,” the court ruled that e-commerce companies must begin collecting sales tax from customers in that state, regardless of whether or not the company has a presence there.

This ruling has implications for other U.S. states and other e-commerce companies besides Wayfair. The genesis of the case is South Dakota’s desire to recoup local taxes that are lost when e-commerce companies—including giants like Amazon and Netflix—aren’t required to levy or pay them. Current trends suggest the likelihood of similar taxes being imposed by other states.

Addressing complex tax requirements

Tax rules will continue to change and evolve, creating a significant pain point—one that more and more companies are solving with dedicated tax solutions. Subscription businesses need to work with a billing provider that has integrated tax solutions that stay current on all tax rate changes, both domestic and international.

If you’re a Recurly customer (or are considering our platform) Recurly is a certified partner for Avalara AvaTax. Recurly customers can either directly integrate their own Avalara AvaTax account with their Recurly site or use Recurly’s out-of-the-box tax solution powered by Avalara. Our partnership with Avalara automates a merchant’s sales tax process and includes precise tax rates (with “rooftop-level accuracy,” i.e. down to the parcel), taxability rules, jurisdiction-source rules, detailed tax reporting, and other Avalara add-on services. Visit this page to learn more.

And look for an announcement coming soon regarding additional tax resources for Recurly.

 

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