LOADING

Loading
Click here to force load
Tap here to force load

About State Sales Taxes

How The Wayfair Ruling Impacts Your Relationship w/NEHERP

Select A Version:

This is a complex issue, and it's hard to explain it quickly. Please select whatever explanation you've got time for!
Tiny Version
2 Minute Read
Long Version
10 Minute Read
States We're Unable To Accept Orders From:
Illinois, Minnesota, North Carolina
(We're working on a solution as of 4/5/19!)
See Full Version Instead
Introduction
Posted by Mike S, one of the owners of NEHERP 04/01/19
Some states are now requiring businesses without physical (in-state) locations to collect and remit sales tax. We're happy to do our part wherever we can, especially in states where we do enough business to support extra accounting work. Instead of considering the amount of revenue a business does, some states are using "transaction quantity" as the determining factor for whether or not a business will be required to collect, track, and omit state & local taxes. This spells disaster for small Internet businesses like us, who rely on lots of small-dollar transactions to survive. Some states would require us to keep track of different tax rates between hundreds of towns, which would be crushingly expensive for us considering the relatively small amount of revenue we do in certain states. Our software can't do this automatically, we don't have an accountant on staff, and there's simply not enough profit generated by some states to cover the expense. (For reference, we've only got a two person office team!) We truly appreciate every customer's business, and we don't take this decision lightly. Blocking orders from certain states during a couple months this year is the last thing we want to do, but it's the only option we can afford.
What's Changing
Many states don't have laws like this, and we're a small enough company to not be impacted by most other states which do. Moving forward, some states with straightforward tax structures will be charged sales tax during checkout. We will be unable to serve customers in a handful of (low revenue / high tax difficulty) states during certain months, to ensure we stay firmly below the yearly "transaction count" triggers. We hope the people impacted will understand that our hands are tied and we wish there was a better way. Hopefully the bipartisan solution H.R.6824ext. link passes soon, since it would fix the problem for every small Internet business in the country. Meanwhile if you live in a state which we're unable to sell to at this time, we hope you'll support one of the other small businesses catering to this awesome hobby.
Customers with gift certificates who live in states we're not currently shipping to are exempt from this policy, and can use this form or contact us to order. We won't leave you hanging!
See Full Version Instead
Introduction
Posted by Mike S, one of the owners of NEHERP 04/01/19
A federal law recently changed which allows certain states to force businesses to collect and remit state sales taxes - even if the business doesn't have a physical location in that state. Many states are making businesses collect & remit taxes if they do over a certain dollar amount, which makes pretty good sense to us. A few other states have set seemingly arbitrary "transaction number thresholds" to determine when businesses would be required to collect & remit taxes. For example, "If a business does over 200 transactions per year in "X" state, they'll need to collect & remit taxes". Small businesses like us (which have lots of small orders on our own platform) could potentially be forced to keep track of hundreds of small transactions across hundreds of towns with hundreds of different tax rates. Unlike bigger businesses with entire accounting departments to rely on, our business has just two people who work in our office. (The owners!) For us, selling to certain states will become an absolute nightmare past a certain number of transactions, and we're being forced to protect ourselves with some new policies.
What's Changing
Every state where we will be solidly hitting the threshold(s) for remitting taxes will now be charged tax during checkout to comply with the new laws. States where we do very little business but could potentially hit the "transaction number threshold" required to file will simply have the amount of orders capped below that number for the year. In other words, we will be forced to block sales to certain states late in the year if the number of transactions approaches the maximum amount allowed by the state's threshold law. To illustrate why we've been forced to implement this policy, please consider the following example. If we do 199 transactions over the course of a year in a state with a "200 Transaction Threshold" there's zero tax burden. At 200+ orders, the tax burden may apply to all 200 orders already placed plus any thereafter, which could cost thousands of dollars in accounting fees & labor. We truly hate saying "no" to sales just as much as we hate the thought of inconveniencing our awesome customers. Still, it's the only solution we can afford at this time. Hiring an accountant to keep track of all of the possible city & state taxes applied to each transaction would be a financial burden we simply couldn't handle, especially in states where we do fairly little revenue to support the cost.
Final Words
Jessica and I (Mike) have lost so much sleep over these problems it's difficult to describe. The frustrations we've felt can't be understated. From our point of view, some states are essentially "capping" how much business our company can do before we need to invest hundreds (if not thousands) of dollars in accounting fees & dozens of hours of our own labor. If we were doing enough revenue (dollar-wise) in those states, we'd be glad to make it happen, since it would be financially possible to do so. Unfortunately we're small enough of a company to barely meet these "transaction count" thresholds in some states, so there's just not enough profit to support the significant investment required. If there was any economically viable solution besides simply blocking orders to certain states after a certain transaction count has been met - you can bet we'd take that route. Unfortunately that's not the case. Please understand that we appreciate your support genuinely, and can't wait until our government(s) come up with a real solution for this problem. Hopefully the bipartisan solution H.R.6824ext. link passes soon, since it would fix the problem for every small Internet business in the country!
See Tiny Version Instead
Introduction
Posted by Mike S, one of the owners of NEHERP 04/01/19
On June 21 2018 the Supreme Court ruled that states were allowed to tax remote (internet-based) sales, even if the business has no presence in the state. Up until then, states could only enforce local tax laws when a business had a physical location in the state. Shortly after the ruling, certain states began writing laws requiring some businesses to register, collect tax, and remit payments to local governments regardless of the company's physical location.
Requirements For Reporting
The states which are choosing to write new "wayfair" related laws are using certain thresholds to determine whether or not a business will be required to collect & remit sales tax. Some states are using revenue as a metric for requiring a business to collect & file. For example, "if a business does more than $100K/year" in the state, they'll need to participate and handle state sales tax. (Makes sense, right?) Unfortunately some states use "number of transactions" as the threshold to collect & file. This spells disaster for small Internet businesses everywhere, since lots of small shops rely on lots of small-dollar transactions to survive. (Us included!) In other words, a business which does $99,999.99 in sales in a state would be exempt, so long as they do less than 200 transactions. Businesses which sell (any amount of revenue & expense) on giant 3'rd party marketplaces are also typically exempt. Meanwhile small businesses which have 200 $5 transactions ($1,000 total) in a state would be required to collect & file.
The Problem For Small Businesses
Hiring an accountant is one of the most expensive parts of running a little company. The task of remitting state sales tax is not as simple as it seems, and in some states it can be downright brutal. Being required to keep track of hundreds of small transactions across hundreds of towns with hundreds of different tax rates would be crushingly expensive for us, considering the relatively small amount of revenue we do in certain states. We're being forced to take action to protect ourselves from being crushed by accounting fees and onerous reporting requirements. We understand states need money to function and we genuinely want to do our part, but the tax complexity is too high and revenue too low in some places for our small business to bear. The plan for 2019 is as follows.
States Without "Wayfair" Laws & Those Unaffected
The overwhelming majority of the country will not be impacted by this for now. We're either a small enough company to not hit the minimum thresholds per state, or the states simply don't have these laws for us to worry about. Only the states listed at the top of this page will be impacted by changes in our policies.
States Where We Now Collect Sales Tax
Certain states where we do enough business will now have taxes applied to their orders. Other states where the transaction count threshold will be quickly met that have very simple tax structures (one flat tax per state) will also have tax collected and applied. The added accounting expenses will be considerable for our small business, but this is the law now, and we want to do our part. We also do enough revenue in those states to make it financially possible!
States Which Have "Order Caps" Enforced
During certain months we'll be unable to accept orders from customers living in a handful of states where our company could have barely met the transaction count threshold. This will ensure the threshold is never met, and we'll still be able to serve these states during most of the year. This will only impact customers in states with complex tax structures and/or low revenues where the cost of complying would be too much to handle. To illustrate why we've been forced to implement this policy, please consider the following example. If we do 199 transactions over the course of a year in a state with a "200 Transaction Threshold" there's zero tax burden. Once we hit 200+ orders, the tax burden may potentially apply to all 200 orders already placed plus any thereafter, which could cost thousands of dollars in accounting fees & labor. If we met the threshold, we'd risk wrecking our entire profit margin for the state (or worse) that year. We hope you can understand the position we've been put in, and how few options we have at our disposal. If you see your state listed as one of those we're unable to accept orders from, please do not order. We will allow orders to be placed as soon as we can, and are aiming to ensure orders can still be placed during peak months. This policy may change the following year if revenue in impacted states rises high enough to justify the considerable expense.
A Real Solution
There was a bipartisan bill (H.R.6824ext. link) introduced to the Senate in late 2018 which addresses the crushing pressure being put on small businesses after the Wayfair decision was handed down. That bill could fix the whole situation, and ensure a more level playing field between large & small businesses. In short, it would ensure these laws only apply to multi-million dollar businesses until the process can be simplified enough to not be crushing to small companies & individuals. That would lead way for the online tax problem to be fixed from the federal level. Paying a single Federal Internet Tax would be simple enough for anyone selling online, and the government could divvy up the funds to states accordingly. The states would maintain their revenue, individuals & businesses would be protected from giant corporations, and the consumers would end up essentially paying the state sales tax they should have been paying anyway. To us, it seems like a win-win.
Final Words
Jessica and I (Mike) have lost so much sleep over these problems it's difficult to describe. We're literally losing time with our family due to all the research involved in every separate state's laws. The frustrations we've felt can't be understated. If there was any better economically viable solution available to us, you can bet we'd take that route. Please understand that we appreciate your support genuinely, and can't wait until our government(s) come up with a real solution for this problem. Meanwhile if you live in a state which we're unable to sell to at this time, we hope you'll support one of the other small businesses catering to this awesome hobby.
Customers with gift certificates who live in states we're not currently shipping to are exempt from this policy, and can use this form or contact us to order. We won't leave you hanging!

Something went wrong...

Your browser is blocking active scripts!

This part of our website requires jQuery script to display properly.
Please turn off script blockers and/or allow scripts in your browser settings to continue.
Need help? Google results for "how to allow scripts" by browser:
Chrome | Firefox | MS Edge* | MS Internet Explorer* | Opera | Safari
Email support@neherpetoculture.com for help!
* Our website is best viewed in modern Chrome, Firefox, or Safari browsers. (Not IE / Edge!)
If you suspect an adblocker is blocking scripts, please whitelist us. Our site has no ads to block.