Author Topic: Tax collection for orders shipped to Minnesota State - Effective October 1, 2018  (Read 1590 times)

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Southern Jewel's Fab Finds

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Tax collection for orders shipped to Minnesota State - Effective October 1, 2018

Based on changes to Minnesota State tax law, Amazon will begin calculating, collecting, and remitting sales tax for all orders shipped to customers in Minnesota on October 1, 2018.

Your existing tax calculation settings, order details, and payments reporting will update automatically to reflect this change. No action to your tax settings or seller account is required.

Answers to common questions are available in the Marketplace Tax Collection FAQ. Consider working with your tax advisor to determine any ongoing tax remittance and reporting obligations your business might have.

For more information from Minnesota, see Update for Marketplace Providers.



uncleleroy

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One less state I have to worry about.

WayOutWest

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I was just reading about this on Minnesota's tax dept website.  They do have a small seller exception. The tax collection requirement doesn't kick in until you ship 100 orders to Minnesota OR you have 10 or more sales that total $100,000 in more that are shipped to Minnesota.

MN tax dept link

If Amazon is doing it for us, okay, fine. As for personal sites and such, though, most mom & pop online sellers don't have to worry (yet).

Southern Jewel's Fab Finds

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Good catch.
I've been so busy with life and all that goes along with it, haven't had time to check in.

uncleleroy

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I was just reading about this on Minnesota's tax dept website.  They do have a small seller exception. The tax collection requirement doesn't kick in until you ship 100 orders to Minnesota OR you have 10 or more sales that total $100,000 in more that are shipped to Minnesota.

MN tax dept link

If Amazon is doing it for us, okay, fine. As for personal sites and such, though, most mom & pop online sellers don't have to worry (yet).


Will most mom and pop online sellers (not on a third-party website such as Amazon, eBay, etc.) even bother? If they are having their own website, how many hundreds of thousands of websites are there for agents to go through and search out? And, if they are like me, they have a law firm as a registered agent so anyone looking for the owner will run into the law firm instead. Gotta love that attorney-client privilege.

Southern Jewel's Fab Finds

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Won't the 1099-K throw a wrench into the theory?
Paypal, credit card processors, Amazon Pay, Apple Pay, etc are required to report earnings/payments of 200 AND $20,000.00.
I say Paypal because if it's an option on a website, I'll normally use that or Apple Pay.
So, I would think there wouldn't be a way around this.

Am I wrong?

WayOutWest

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(Standard not an attorney nor an accountant disclaimer)

The 1099K goes to fed govt, and that data carried over to state(s) where you file income tax, so they'll have a clue, but other states won't.

That being said, imho it would still depend on the state income tax ppl talking to the state sales tax ppl, which doesnt always happen.  In Okla, they have been comparing notes for at least a few years now, but with mixed results.

For example, a person who works in sales tax division warned me that if I report zero sales on sales tax report, without showing all my sales first and deducting the non-oklahoma ones as non-taxable sales (with explanation that they were out of state) , that it could trigger an audit (because of total sales on sales tax report not matching total sales on income tax) and that she had seen that very thing happen more than once.  However, I've done this very thing and no audit. I suspect that such things change based on who is running things that year, that enforcement procedures and what to focus on is an administrative decision.

Another one I've seen pop up, as a result of two divisions sharing info, my mother sold an oil lease to another party and it included all equipment on site.  After filing paperwork with corporation commission (the agency in okla that overseas oil and gas wells) she got a demand for payment of sales tax from the tax commission. So, different agencies within the state can and do sometimes share data. But, again, I dont see state and fed sharing data unless you were filing income tax with both.

uncleleroy

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Won't the 1099-K throw a wrench into the theory?
Paypal, credit card processors, Amazon Pay, Apple Pay, etc are required to report earnings/payments of 200 AND $20,000.00.
I say Paypal because if it's an option on a website, I'll normally use that or Apple Pay.
So, I would think there wouldn't be a way around this.

Am I wrong?

There is no way around it for the state that you are in. Minnesota has no right to my federal tax income, so it would not have the 1099K information.

As far as PayPal and other credit card processors reporting to each state how many sales it has processed for each company, are you sure about that? I only thought that the information reported on the 1099K went to the federal government and not to each and every state with the company's business information.

Southern Jewel's Fab Finds

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Nope.
Not sure.
Just googling...alot.
I have brought this up to my accountant.
He is on it, so I'm not as worked up about this as I normally am.

Just ran a 'quasi' report on the taxes I've collected via my main selling venue/Amazon.
The amount is so small. So very small.

I will be checking in with accountant before end of year and this is one of the items I need to make sure I pull reports for or not.


Thanks for input, Steve.
By all appearances, this is going to be a mess.

uncleleroy

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Lucky for me, I don't hit the threshold in any particular state to have to file/collect sales tax. So as of right now, I'm only collecting for my home state of Ohio.

  

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