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Sales Tax Question: New tax laws:how to do it?

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10 Mar 2010, 2:50 PM
#1
thebeveragegourmet avatar

thebeveragegourmet

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Sales Tax Question: New tax laws:how to do it?

Our lovely Governor has signed into law a new tax. The new tax is on soda and candy. The additional tax is 2.9 % on top of the state and local taxes already for in state sales. Problem is, if an in state buyer (CO buyer) buys candy, how do I add that additional 2.9% sales tax on top of the regular tax?

Question 2: along with this new law, CO is now asking all online businesses outside of CO to collect sales tax on all purchases made by CO buyers and submit to CO. That isn't a problem currently but it could be if other states adopt similar laws. From what I understand, it's not simply a flat rate per state, it depends on where the buyer lives and the tax rate there....thousands of tax rates. Is Zen set up to handle that sort of thing? I have a friend on Zen in CA who is wondering how to handle the collection of CO taxes given this new law because of all the percentages.
Any ideas or help would be appreciated. I am just trying to be prepared if/when other states adopt this law so I'm not left swimming upstream without a paddle. This law has already affected my businesses as I earned a fair amount of commission sales from Amazon's affiliate program. As of the other day, they shut down ALL the CO affiliates because of this law. There goes my profit...don't want to lose it all
thanks!


10 Mar 2010, 3:44 PM
#2
Kim avatar

Kim

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Re: Sales Tax Question: New tax laws:how to do it?

JMHO - Join Amazon and boycott Colorado :)

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10 Mar 2010, 3:47 PM
#3
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Re: Sales Tax Question: New tax laws:how to do it?

You would have to create a new tax class and assign it the new rate (original + 2.9%) then assign those products to that class.

The whole state tax thing will, I think become such a nightmare that something will eventually be done at the federal level (unfortunately) to make the rates standardized.

I read an article this morning saying that, beginning next year, payment processors (CC and Paypal/Google checkout included) will be required to provide online merchants who use their services a new 1099 form with all the merchant's activity summarized by month, with, of course. a copy to the IRS.

We can run, but we can't hide. Political activism might be the only solution to all this.

10 Mar 2010, 4:41 PM
#4
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Re: Sales Tax Question: New tax laws:how to do it?

Thanks. If they went to a flat online tax that would be much simpler although if it ain't broke don't fix it in my book.

I don't mind having cc and paypal send 1099's to the IRS. I claim it all anyway so it makes sense. Good to know that it went through though (so no surprises about not knowing).

On the boycott issue: if you live in CO, you can still BUY on Amazon....you just can't advertise (ie: affiliate program) for Amazon. The merchants who sell on Amazon have to submit the sales tax to CO although it's not charged to the buyer via Amazon (they won't allow you to charge sales tax to my knowledge)


10 Mar 2010, 4:51 PM
#5
Kim avatar

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Re: Sales Tax Question: New tax laws:how to do it?

I am currently in Colorado visiting family and this has been a hot topic over the dinner table. The law in a nutshell is that you either need to collect the sales tax from customers in Colorado or report those customers and the amount of the sales to the state of Colorado at the end of the year so the state can collect the tax from the buyer.

Here is a link to the bill - http://www.leg.state.co.us/clics/clics2010a/csl.nsf/fsbillcont3/B30F574193882B4B872576A80026BE0C?open&file=1193_01.pdf

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10 Mar 2010, 7:54 PM
#6
Kim avatar

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Re: Sales Tax Question: New tax laws:how to do it?

Please do not PM for support issues: a private solution doesn't benefit the community.

Be careful with unsolicited advice via email or PM - Make sure the person you are talking to is a reliable source.