Large network marketing organizations tend to be diligent about collecting sales tax.
If yours is not, problems may lie ahead.
From Jim Richmond Professional Tax Services taxman_jr@yahoo.com via www.mlmatty.com…
One of the more perplexing questions facing direct selling companies today is the administration of state and local sales taxes. The general rule of law places the responsibility to collect and remit sales on the retailer. However, the states have authority to impose the responsibility for collection of sales taxes on a seller if deemed necessary. The states of Kansas, Michigan, Missouri, Texas and Washington are asserting nexus for the collection of sales taxes.
On October 1, 2005, the Streamlined Sales Tax Project (SSTP) was enacted. Companies should review this as a way to register and begin collecting. One of the most important features of the project is amnesty. A company with independent sellers in the states of Kansas, Michigan, Missouri and Washington would be well-advised to obtain an agreement or letter of understanding. A company should review its operations in all states to determine if it must register, collect and remit in other states. A company should not register or collect without having an agreement or letter of understanding. There are many benefits a company will derive from administering the sales taxes on behalf of its sellers. Companies that do not seriously address the question of sales taxes and instead ignore the issue altogether may learn too late that they face a significant liability for failure to comply.
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