Sales Tax Expansion
The Supreme Court “Wayfair” decision introduced economic nexus where previously physical presence was basis for requiring companies to collect sales tax.
Economic nexus may subject a printer to a sales/use tax obligation in the state(s) into which printed products are delivered/mailed.
Almost every state has adopted economic nexus laws with varying sales thresholds at which sellers become obligated to collect tax.
If the printer doesn’t charge the applicable sales tax, the purchaser may be obligated to remit use tax if they exceed the destination state(s) economic nexus thresholds.
For printers, a single order being shipped/mailed to multiple destinations is a complex tax scenario requiring the sales price to be prorated to the various destinations and each state and other tax jurisdictions (county, city) tax rates and rules applied to determine the correct tax.
Tax for mailings will be assessed for printed material produced on or after Oct. 1, 2023 by the location of the “Bill to” entities’ address. Currently collecting in 5 states: MO, KS, CA, AZ, and IA.
Same methodology for assessing tax for mailings for printed material produced on or after January 1, 2024, however, it will expand to 27 states where Modern Litho has economic nexus.
AR, AZ, CA, CO, FL, GA, IA, IL, IN, KS, KY, MD, MI, MN, MO, NC, NE, NJ, OH, OK, PA, SD, TN, TX, VA, WA, & WI
Brown Printing sales tax states are MO, CA & PA.
Kevin Heislen CFO, Modern Litho