Tax at Flyin' Miata
Dear Flyin' Miata customer,
You may have (depending on where you live) noticed FM is collecting sales tax on your recent orders. Because there is a lot of confusion surrounding this subject, we thought it prudent to explain how and why we are now charging sales taxes in many states.
This is due to a 2018 Supreme Court decision on a case called South Dakota vs. Wayfair. Basically it says that each state and taxing entity is allowed to make their own rules for collecting sales tax from out of state vendors. Unfortunately, the rules vary fairly dramatically from state to state making tax collection challenging especially for small businesses.
Prior to the Wayfair decision, states collected tax only if the merchant had a brick and mortar store presence in the state. Now, depending on the state, it may be:
a $$ sales threshold
a number of orders threshold
or a combination of either/or/and of the two thresholds.
This is known as establishing "economic nexus" within a state. If you really want to punish yourself, you can read the economic nexus rules for each state. FM plays by the legal rules, so if you check out and see sales tax in your cart it’s because we’ve established economic nexus in your state and are required to collect and remit taxes. It's a nightmare. It has required us to hire two different companies to keep track of when we hit nexus in a state and how much we owe each state. No, we're not very happy with this either.
Why isn't vendor X collecting sales tax? If they haven't sold enough to meet nexus in your state they aren't required to collect. Or, they aren't keeping up with the changing market and are crossing their fingers.
Please feel free to contact us if you have any questions.