I know it’s August and probably the last thing on your mind is the Supreme Court’s recent Wayfair decision on out-of-state sellers.
However, given the long-term implications of the case and its anticipated impact on your clients and e-commerce in general, I thought you’d be interested in this recent Accounting Today piece. In the article, I discuss the ruling’s potential effect on small and medium businesses:
- Although there was nothing about protecting small business in the actual holding of the Wayfair decision, it did have a lot of vague ideas on the subject, observed Dean Zerbe, alliantgroup’s national managing director and former senior counsel with the Senate Finance Committee. “Good luck with that! I don’t think states will show a restraining hand,” he said.
- “Right after they have sales tax nexus, they’ll try to extend it to business activity tax,” Zerbe predicted. “You’re here for sales tax — guess what? You’re also here for BAT,” he said. “Nothing makes states happier than taxing people that don’t vote or live there.”
- The decision paves the way for the “big boys” to get even bigger, suggested Zerbe. “It’s a chance for them to crush their small and medium-size competitors. Congress will really need to listen to the smaller retailers, and step in to protect them. They need to set a standard safe harbor.”
It’s still too early to tell what, if anything, Congress may do in response to the Wayfair decision. I’m very interested in hearing from our Strategic Advisory Board and CPA partners on the issue of taxation of remote sellers. What impact will this have on your clients and what do you think Congress should or shouldn’t do in this area? I’m also interested to hear how you think the states will react – will they create safe harbors for small businesses, tax cuts, or pursue other protective policy measures?
If you have any further questions about the ruling, please click here to email me directly.
Thanks and I hope you are enjoying the days of summer.
Dean Zerbe is alliantgroup’s National Managing Director based in the firm’s Washington, D.C. office. Prior to joining alliantgroup, Zerbe was Senior Counsel and Tax Counsel to the U.S. Senate Committee on Finance. He worked closely with then-Chairman of the Finance Committee, Senator Charles Grassley, on tax legislation. During his tenure on the Finance Committee, Zerbe was intimately involved with nearly every major piece of tax legislation that was signed into law, including the 2001 and 2003 tax reconciliation bills, the JOBS bill in 2004 (corporate tax reform) and the Pension Protection Act. Zerbe is a frequent speaker and author on the outlook for short-term and long-term changes in tax policy, as well as ways accounting firms can help their clients lower their tax bill.
Have a question for Dean?