More and more products are being sold and purchased on virtual marketplaces, like a company’s own website or through third-party platforms such as Amazon, eBay and Wayfair. With this, it was only a matter of time before sales and use tax nexus legislation was revamped so states could collect sales tax on these virtual sales.
The 2018 U.S. Supreme Court decision in South Dakota v. Wayfair determined that a state could impose a duty to collect sales taxes on businesses that make retail sales even if they did not have a physical presence in the state (“remote sellers”). With this decision came a new paradigm for ecommerce.
Do you have operations, inventory, and/or sales into multiple states? Do you use Fulfillment by Amazon (FBA) or another third-party facilitator to sell and/or deliver goods to customers? Do you have your own fulfillment center(s) or use Third Party Logistics (3PL)? If so, are your operations up to speed with the Amazons of the world, or do you need to rethink the way you do business?
Ecommerce brings about opportunities and challenges. Opportunities include a booming economy, investments in technology that make it easier to conduct a multistate business, and an increased demand for logistics. Challenges include the trade war and tariffs, increased costs for space and freight and the ability to attract and retain the right people with the right skills in a highly competitive labor market.
In this new age, you need an advisor who has a new way of thinking. Lean on Sax’s Consumer Products & Ecommerce Practice for tailored solutions to help resolve the complex issues and dynamic opportunities brought on by ecommerce.