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13 August 2019, 03:52 AM | #1 |
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Join Date: Dec 2014
Location: NYC
Posts: 281
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South Dakota v. Wayfair - bad for dealers?
Any tax guys know if this ruling will start having impacts this year regarding sales tax that could negatively affect dealer business models?
For reference, previously e-commerce merchants were not required to collect and remit sales tax on transactions where they did not have a "nexus", or physical location. This is why when you buy a watch from a dealer, there isn't a sales tax on top of the wire price, but there will be if they're shipping it within the same state where their company/operation is registered; to avoid it in those situation, they would offer to ship the box out of state to avoid sales tax. However, South Dakota v. Wayfair won in the favor of South Dakota where sales tax is now collected even if a nexus doesn't exist. California, Texas, and New York are set to adopt economic nexus laws in 2019 and others have already started to draft their own. As a result of this and the way I read it, dealers will soon have to charge sales tax on top of the wire price, which they either have to eat or push it onto the customers. If I am right, this would be a 8-10% increase in dealer prices across the board. |
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