What could Utah and New Jersey possibly have in common? On the topic of tax policy, no less. Well, it turns out SB 47 (Harper) is that common link.
SB 47, Sales and Use Tax Remittance Amendments, removes the requirement that a seller pay or collect and remit sales tax simply because they sold 200 items, but maintains the requirement in the instance that their sales exceed a value of $100,000. A similar bill is currently being considered in the state of New Jersey, and similar bills have recently passed in Indiana and Wyoming.
This bill protects sellers selling a “large” quantity of low-cost items from having to comply with complicated and possibly expensive tracking and accounting. For example, if I sell 200 knitted baby hats at $5 each, I’ve only sold $1,000 of goods, but, under current law, would be required to collect and remit sales tax, incurring significant cost to me and perhaps disincentivizing me from selling my goods in Utah. Raising this threshold to $100,000 would require me to knit and sell 20,000 hats (which, considering I can’t knit, is unlikely) before assuming this responsibility.
SB 47 is one of many “nitty gritty” bills that solves a small but significant tax issue in Utah Code. We are grateful to legislators who take the time to review code, craft solutions and run bills to address these. While it won’t make headlines, it will make a difference in the lives of many small and medium-sized business owners, and that is the oft-overlooked joy of tax policy.
See more: https://taxfoundation.org/blog/economic-nexus-utah-new-jersey-online-sales-tax-reform/