News and Insights

New and Updated Information on States’ Legislative Efforts to Enforce Tax Collection by Remote Sellers

Tax Development Feb 23, 2017

E-commerce continues to thrive, so it is no surprise that enforcing tax collection by out-of-state sellers continues to be at the top of many, if not most, states' to-do lists. Below is some of the recent activity we’ve seen in this area:

Earlier this month, the Arkansas Senate passed S.B. 140. If it becomes law, S.B. 140 would require out-of-state retailers, who deliver more than $100,000 in products or services into the state or make at least 200 Arkansas transactions per calendar year, to collect tax. This would be a game changer for many online retailers. Coincidentally, less than a week after S.B. 140 passed the Senate, Amazon announced it would begin collecting Arkansas tax beginning March 1. The next step for this legislation is with the House, and we will continue to monitor.

South Carolina
Last month, we issued a tax development on South Carolina Senate Bill 214, which was introduced in the Senate on January 10, 2017. If enacted, it would create a rebuttable click-through nexus provision. Further details on the provisions of the bill can be found here . On February 14, S.B. 214, was passed by the South Carolina Senate. We will continue to monitor it as it moves to the House. 

On February 17, Pennsylvania House Bill 542 was introduced. If enacted, it would require out-of-state sellers to notify purchasers of their use tax obligation and responsibility to report the tax on their Pennsylvania income tax forms. We will continue to closely monitor this legislation.

E-commerce is a massive industry, and it is growing by leaps and bounds. With budget shortfalls facing many states, we expect we’ll continue to see states take these types of steps in an effort to capture their piece of the e-commerce pie. We’ll continue to closely monitor any activity and will provide updates as things develop. We predict this form of legislation will remain very active in 2017.