November Roundup: Sales tax laws you need to know

While you focus on your business, we stay on top of legislative and policy changes that can affect your sales tax compliance.

Tax news highlights from November include movement on the economic nexus front in Missouri and an unusual tactic for holding marketplace sellers liable for sales tax in Washington state. Read on for more details.

Bite-size updates.

There have been quite a few food-related wacky sales tax posts this year, covering everything from collection requirements for children operating lemonade stands to Utah’s unusual new policy for direct-to-consumer wine shipments. Learn more.

Colorado to increase tax on cigarettes and tobacco products.

Residents of Colorado voted to raise existing taxes on cigarettes and tobacco products as well as establish a new tax on nicotine products. The tax increases will occur in stages through July 2027. Learn more.

Economic nexus laws create new tax collection obligations for software and SaaS companies.

Software and SaaS sellers may be required to register then collect and remit sales tax because of economic nexus, which is enforced in 43 states, the District of Columbia, and some parts of Alaska. Learn more.

Four more states have legalized sales of recreational cannabis.

Residents of Arizona, Montana, New Jersey, and South Dakota voted to allow the possession, use, and retail sale of marijuana. The taxes on these products will be a welcome source of revenue. Learn more.

Kentucky prepares for direct-to-consumer (DTC) shipments of beer, wine, and spirits in 2021.

Businesses licensed as a manufacturer of malt beverages, spirits, or wine in their operating state can start the process of applying to make DTC sales in Kentucky. Learn more.

Missouri edges ahead in race to adopt economic nexus and marketplace facilitator law.

Of the two sales tax states that don’t yet have economic nexus (Florida and Missouri) and three that don’t yet require marketplaces to collect and remit sales tax on behalf of sellers (Florida, Kansas, and Missouri), the Show-Me state could be the first to put a bill on the governor’s desk. Learn more.

More online sales could create more sales tax collection obligations.

Online sales have exploded during the COVID-19 pandemic, underscoring the need for retailers to monitor sales in all states. Some states require remote sellers to register and start collecting sales tax as soon as they meet the economic nexus threshold. Learn more.

New compliance obligations for businesses making exempt sales.

Although manufacturers, resellers, and wholesalers may not need to collect and remit sales tax on online sales into other states, they may still need to register with the tax authorities and validate exempt sales. Learn more.

New York considers sales tax holiday for restaurants.

To help restaurants hit hard by the pandemic, a New York lawmaker wants to establish a weeklong sales tax holiday on restaurant food and drink. Learn more.

Washington state goes after marketplace sellers for past sales tax.

A marketplace seller can establish physical presence in Washington, and therefore an obligation to collect Washington sales tax, because the marketplace facilitator digitally transfers ownership of inventory in the state to the seller. Learn more.

Who needs a sales tax permit and how to get one.

We’ve updated our state-by-state guide to sales tax permits. Learn more.

Why it’s so hard to source in-state sales in Texas.

Sales tax sourcing in Texas is kind of like a square dance, which can make it hard to avoid tripping up. Learn more.

Tired of trying to keep up with sales tax changes around the country? Automating tax compliance can help.