PPB March 2019

books rock bands has a special t-shirt designed for each band. The t-shirt is given free to all customers who purchase a ticket to the event. In this case, the t-shirt is for resale and its cost is included in the cost of the ticket. Accordingly, it is the venue that has purchased goods for resale usually giving the supplier a resale certificate exempting the supplier from collecting sales tax. In other words, the entertainment venue must remit sales tax after ascertaining the portion of the ticket price properly assignable to the t-shirts. Sales Tax Primer The Supreme Court’s Wayfair ruling replaced the physical presence requirement for when states must tax remote sales and created an economic nexus standard based on the amount of business done in a state. The ruling suggested strongly that the South Dakota law requiring remote sellers that meet thresholds of $100,000 in annual in-state sales or 200 transactions to collect and remit sales tax. Soon every promotional products business may be required to collect sales—and use—taxes even if the only connection to the state is a web page and/or a customer. In fact, the business may have to collect sales tax even if there is no web presence. While the rules vary from state to state, actively attending a trade show in a state or having representatives in a state (who may not even be employees) can require collecting sales taxes. There are 45 states with sales tax laws. Every state will, in all likelihood, want to increase revenue by following the precedent set by the Supreme Court with its Wayfair ruling. The bad news is that every promotional products business is now—or soon will be— responsible for keeping track of the ever-changing sales tax laws in every state where they have “economic nexus” in order to ensure compliance. For more than 25 years Mark Battersby has been writing about tax and financial topics for magazines, newsletters and the web. He lives in Ardmore, Pennsylvania. Soon every promotional products businessmay be required to collect sales—anduse— taxes even if the only connection to the state is a web page and/ or a customer. www.TheDistributorExchange.com • 844-251-8544 (toll free) All inquiries are strictly confidential. Do you want to sell your distributorship? We can help you sell your distributorship quickly and easily. “This type of business transaction was completely foreign to me so it was invaluable to have The Distributor Exchange take us through the process step by step. They went above and beyond in all regards. I couldn’t be happier with their efforts to make this a win win for all parties involved.” – Cindy Gibbs - Big Fish Branding 96 | MARCH 2019 | THINK