Navigating 10,000 Sales Tax Jurisdictions

The number of sales tax jurisdictions in the United States has risen to 9,998 –up 300 from 2011. The table below breaks out the number of sales tax jurisdictions by state:

Total Sales Tax Jurisdictions, 2014
Alabama 791
Alaska 103
Arizona 131
Arkansas 370
California 231
Colorado 307
Connecticut 1
District of Columbia 1
Florida 56
Georgia 162
Guam 1
Hawaii 2
Idaho 9
Illinois 443
Indiana 1
Iowa 994
Kansas 428
Kentucky 1
Louisiana 341
Maine 1
Maryland 1
Massachusetts 1
Michigan 1
Minnesota 35
Mississippi 3
Missouri 1242
Nebraska 209
Nevada 18
New Jersey 2
New Mexico 142
New York 84
North Carolina 105
North Dakota 137
Ohio 96
Oklahoma 587
Pennsylvania 3
Puerto Rico 79
Rhode Island 1
South Carolina 41
South Dakota 251
Tennessee 125
Texas 1515
Utah 310
Vermont 12
Virginia 174
Washington 346
West Virginia 11
Wisconsin 70
Wyoming 23

TOTALS 9998
Source: Vertex, Inc.
Despite simplification efforts on both the state and federal level, it would appear that the complexity of navigating sales tax in the United States has risen.

The Marketplace Fairness Act (MFA), a piece of legislation that would give states the authority to require remote sellers to collect and remit sales tax, overwhelmingly passed the Senate last year. Although it has been held up in the House of Representatives, pressure from numerous supporters is indicative that it, or future legislation, will eventually pass both houses. The MFA includes a provision that stipulates that certain simplifications must be made to a state’s tax code in order for states to qualify to collect online sales tax.

According to the Tax Foundation, an independent non-partisan tax research think-tank, in an attempt to convince Congress to allow jurisdictions to collect sales tax on interstate internet transactions, states have made the claim that they have simplified their sales tax systems. The Tax Foundation asserts that, while the number of jurisdictions within a state isn’t everything, “no matter how it’s measured, states haven’t yet fulfilled their promises to simplify their sales taxes.” Still, the likelihood that businesses will soon have collection liability on internet sales is becoming a more plausible reality as the MFA continues to gain traction.

Cyber Monday Tax Evasion

This article from Forbes, explores the amount of tax evasion that is occurring due to Cyber Monday. Cyber Monday follows Black Friday, and is typically the busiest day of the year for online shopping. States often look forward to Black Friday, because it generates a significant amount of sales tax revenue. Cyber Monday, however, is a day where states lose copious potential revenue.  Out-of-state retailers are not required to collect and remit sales tax without a physical presence or substantial nexus within the state. Even if the tax is not collected by the seller, the buyer typically still owes the use tax on the product; however they rarely report this. The result is high profits for retailers, and little to no revenue for states.

http://tinyurl.com/lqcpobt

Resistance To Tech Tax/Service Tax!

This article from USA Today outlines the problems that states are having keeping up with an economy that is ever shifting from industrial and products based to technological and service based. States are running into resistance as they attempt to implement new technology taxes and service taxes.

This resistance is best illuminated by the backlash the Massachusetts legislature experienced after it passed a sales tax on tech services. The 6.25 percent tax was designed to pay for roads, subways, buses and bridges. But after it passed the tech industry heavily lobbied, and the tax was repealed.
The article also points out that most states do not tax services, and that the taxation of consumer goods can only go so far.

To read more:
http://tinyurl.com/lywgqme

Quoath South Dakota, “Quest No More.”

South Dakota’s quest service which could be used to file Sales and use tax returns, and contractors excise returns will not be available after July 23, 2013. Instead’ the South Dakota Department of revenue suggests using the EPATH service to electronically file said returns.

http://www.state.sd.us/drr2/businesstax/quest/quest.htm

Flood Money!

North Dakota is offering a Sales Tax Refund for residents who incurred flood damage in the 2011 flood. There are some stipulations though.

To find out if you qualify, or to find out how to file for this refund visit the link below:

http://www.nd.gov/tax/misc/faq/salesanduse/floodfaq.html#Question10