As expected, Rhode Island enacted legislation effective July 1, 2019 that requires remote retailers, marketplace facilitators, and referrers to register with the Rhode Island Division of Taxation and collect and remit Rhode Island’s 7% sales and use tax. But one month into the beginning of compliance, landmines and critical unanswered questions litter the now-revised Remote Sellers, Referrers, and Marketplace Facilitators Act (the “Act”). The Act was made constitutionally possible by the U.S. Supreme Court’s 2018 landmark decision in South Dakota v. Wayfair, Inc., which dispensed of the long-standing bar against a state’s imposition of sales tax where the taxpayer had no physical presence in the state. The Act applies if a remote retailer, marketplace facilitator (such as Amazon), or referrer has annual sales to Rhode Island customers exceeding either $100,000 or 200 transactions.
If you are a remote retailer, marketplace facilitator, or referrer, here are three major landmines in the Act and how to avoid them or, at least, control the damage.
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by adler pollock &sheehan p.c.
august 13, 2019