As eCommerce becomes an increasingly preferred method for B2B sales, after already establishing a firm position in the B2C realm, it's time for lawmakers to update regulations in order to accommodate modern practices.
Recently, this blog examined the push to adjust PCI compliance requirements for online vendors, but there is still one pressing issue that dominates a number of sales-based industries - tax. Currently, most states have some form of sales tax and 24 states are full members of the Streamlined Sales Tax Agreement. They all contain vendors that conduct business online. Additionally, customers all over the country have a tendency to "cross borders" by buying online from a company located in another state.
According to multiple news sources, both sides of congress agree on imposing sales tax laws that address online shopping. This is an important bill for states that rely on sales tax as a major source of revenue but have struggled in recent years due to the continued shift toward online shopping.
Norton Francis, a guest blogger with the Christian Science Monitor, wrote about the importance of the decision in a recent article.
"The measure would finally resolve a decades-old dispute over whether states can collect sales taxes on mail-order and online purchases," Francis wrote. "Currently, states are barred from requiring out-of-state sellers to collect sales taxes, unless the retailers have a physical presence [or nexus] in their jurisdiction. The MFA would allow states to require sellers to collect these levies no matter where the firms are located."
While tax regulations may be changing, some B2B and B2G transactions may be tax exempt. However, it is important to note that in order for tax exempt commercial card transactions to qualify for the lowest available Interchange rates, merchants must submit Level 3 data.
As vendors implement payment solutions designed to accommodate all of their customers while reducing their own processing costs, it's important to stay up-to-date on any and all news pertaining to online sales. Working with a B2B payments consultant will allow vendors to acquire the solutions that accommodate all of their processing needs.