A recent change to the laws regarding how sales tax have to be collected by online sellers means that we now have to collect sales taxes in states where we meet state-specific transaction thresholds.
Prior to this ruling, online sellers only had to collect sales taxes in states where they had a physical presence. For Keap, this meant that we only collected sales tax in New York State. However this new ruling totally changes this landscape.
Given we have only collected sales taxes in New York thus far, it came as a surprise to suddenly have to begin collecting sales tax in ten further states. However, as we’ve reflected on this, we have come to see that there’s a civic reason for supporting this decision.
As more businesses and sales have shifted to online, large companies have utilized the ability to be physically present in certain states vs. others as a tax-avoidance strategy. Purchases that would have previously happened in main street retail stores, creating local sales tax revenues, have been disappearing. The result has been billions of dollars in lost sales taxes for states, meaningfully reducing the investments that can be made in communities around the US.
Though we may be surprised to have to start charging sales tax in many more states, we believe the Senate made the right decision to prioritize sensible tax legislation that rebalances our economy, over the arguments of the likes of Amazon, Overstock and Wayfair.
We know this has real economic consequences for you, our customers. However, we hope that this article explains why this happened and the benefits of your online purchases creating income for your home state and local governments.
Which States For Sales Tax?
As of January 2022, we will begin charging sales tax in the following states:
We will be checking on our sales tax liabilities quarterly and will add new states here as we are informed of our need to start charging taxes to stay compliant with changing tax laws and our growing business.
Many thanks for taking the time to read this, and we’re always available to answer questions at TheLab@KeapBK.com.
With warmth,
