Will You Now Pay More in Sales Tax
As most everyone knows by now, the Supreme Court last week gave their final ruling on the Wayfair case and ruled that states can require online companies to collect sales tax from their customers. Even though South Dakota won the case, it is likely that this may still end up in Congress which may provide guidance that will apply on a national basis. For now, the ruling allows each state to come up with their own rules on collecting sales tax which may be very problematic for many small businesses. This actually helps Amazon (since they have been collecting sales tax for a while already), not hurts them.
For our farmers, this may seem like not a big deal. However, many farmers do purchase items over the web and this may subject you to paying sales tax on your purchases even if you are exempt from sales tax. I would guess most online vendors will automatically collect the sales tax from all customers. This means you may have to pay the sales tax and then try to get a refund from your state.
For now, there is not much you need to do, just know that in the future, you may owe sales tax on purchases you make now that are not subject to sales tax or you may need to attempt to collect sales tax paid from you state. Either scenario does not sound like much fun.
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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