Learn How Evolving Sales Tax Laws Impact Drop Shipments and How to Ensure Compliance Across Various States
Many retailers and suppliers engage in transactions that are known as Drop Shipments without full consideration of the tax effects. In light of the Supreme Court’s decision in South Dakota v. Wayfair, Inc., et al., nearly every state that imposes Sales and Use Taxes has amended their laws, regulations, and guidance to force out of state retailers and suppliers to collect Sales Taxes on their behalf. Despite some commonalities, the various laws are frequently inconsistent and counterintuitive.
This topic will help the attendee identify Drop Shipments and determine when their business or client may need to collect Sales Taxes in the various states, specifically focusing on the federal Constitutional underpinnings and the ways states have chosen to update their laws, regulations, and guidance, as well as determine the best way to bring their business or client into compliance.
Learning Objectives
- You will be able to define drop shipments.
- You will be able to describe when drop shipments are used and the roles of the different parties.
- You will be able to explain the tax consequences of drop shipments for the retailer, supplier, and customer.
Credits
- Live Webinar
- AIPB 2.0
- CPE 2.0 including Taxes 2
Agenda
What is a Drop Shipment and Why Are They Used?
What is the Location of the Sale in a Drop Shipment?
Tax Treatment of the Parties
- Retailer
- Supplier
- Customer
How Much is the Sales/Use Tax?
- Final Sales Price
- Are Shipping and Handling Taxable?
What is Nexus and How Much is Enough to Be Substantial?
- Physical Presence
- How Substantial Is Substantial?
- Trailing Nexus - How Long Do I Have Nexus?
- Affiliate Nexus
- Click-Through Nexus
- Economic Nexus
- Physical Presence Requirement Was Eroding Before Wayfair
- South Dakota V. Wayfair, Inc., et al.
- Reporting and Notification Regimes
Am I in Compliance?
- Two Questions:
- Are My Goods/Services Taxable in Each Jurisdiction?
- Do I Have Substantial Nexus in Each Jurisdiction?
- Options to Become Compliant
Questions
Speakers
Matthew E. Foreman, J.D., LL.M.,
Falcon Rappaport & Berkman LLP- Partner and Co-chair of the Taxation Practice Group at Falcon Rappaport & Berkman LLP
- Advises businesses on the tax effects of a variety of corporate transactions, including taxable and tax- free reorganizations, mergers, sales, and acquisitions
- Advises clients on a variety of tax issues related to cryptocurrencies, including initial coin offerings (ICOs), taxability of staking and air drops, taxability and governance of DAOs, and the imposition of Sales and Use taxes on the issuance of non-fungible tokens (NFTs)
- Admitted to practice law in New York State and New Jersey, and admitted to practice before the United States Tax Court; Member, New York City Bar Association; Secretary, State and Local Tax Committee of New York City Bar Association; Member, Task Force on Digital Technologies; Member, Tax Section of New York State Bar Association
- Rated as a New York Metro SuperLawyer in the field of Taxation
- LL.M. degree in taxation, New York University School of Law; J.D. degree, The Pennsylvania State University, Dickinson School of Law; B.S. degree, University at Albany, State University of New York
Who Should Attend
This live webinar was designed for accountants, CFOs, controllers, tax managers, presidents, vice presidents, business owners and managers, bookkeepers, and tax preparers.
