In 2018, the Supreme Court came to a decision on the case South Dakota vs. Wayfair Inc., changing sales tax requirements with online sales. These changes will affect your race, so we've been preparing a taxability study to determine what aspects of your race will be affected. This slide presentation accompanies our August 2019 Sales Tax webinar. We will continue to update the taxability matrix in this presentation as new information becomes available.
2. RunSignup does not provide tax, legal or accounting
advice. This material has been prepared for informational
purposes only, and is not intended to provide, and should
not be relied on for, tax, legal or accounting advice.
RunSignup makes no representations, warranties, or
assurances as to the accuracy, currency or completeness
of the information provided in this presentation.
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3. The Sales Tax Environment is Changing
Quickly
▷ South Dakota v. Wayfair (June 2018)
▷ Cleared the way for states to charge sales tax on interstate purchases
▷ Put teeth into the concept of economic nexus
▷ Did not make anything new taxable, only allowed states to collect sales tax on
interstate sales
▷ Marketplace Facilitator Laws
▷ New state laws that compel platforms that facilitate sales (Amazon & Others) to
collect and remit sales tax on behalf of their sellers
▷ Currently 35 states have marketplace facilitator laws. Experts predict 45 states with
sales tax will have a marketplace facilitator law within another year
▷ RunSignup and other platforms that facilitate the sale of registrations and tickets for
sellers will need to comply
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4. What is Nexus?
▷ Nexus describes the connection between a state and a business
▷ Having Nexus is generally required to compel the collection and
remittance of sales tax
▷ Physical Nexus – Maintaining an office or other facility or having
an employee operating in the state
▷ Economic Nexus – SD v. Wayfair empowered economic nexus
statutes, minimum $ amount of sales or transactions into a state
can establish Nexus
▷ Marketplace Laws are Overriding Nexus Considerations
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5. What is RunSignup doing about sales tax?
▷ Commissioned Sales Tax Study
▷ Determined what common items sold by races and RunSignup are taxable in
what states (taxability matrix)
▷ Determined in what states RunSignup will collect and remit on behalf of races
(marketplace facilitator) and in which states races will make their own decisions
on where to collect and remit
▷ Updating RunSignup platform sales tax functionality:
▷ Incorporating item taxability matrix into race setup and checkout
▷ Connecting to sales tax automation platform for on demand tax rates at checkout
▷ Building new RSU sales tax reports to allow races to do state sales tax reporting
▷ Preparing to implement collection and remittance in Marketplace states
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6. What kinds of things are
taxable?
▷ Race Registrations, Merchandise (Shirts, Hats, Mugs, etc.),
Memberships, Tickets (Admissions), Processing Fees
▷ Each state has their own rules on taxability of each of these items
▷ Each state has their own rules about exemptions for non-profits
▷ Some states have complex exemptions for race registrations or for
the amount of time or number of events for which a non-profit can
be exempt
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7. Isn’t my non-profit exempt from sales tax?
▷ Non-Profits are exempt from federal and state income taxes
▷ Non-Profits are exempt from Paying sales tax in some states (where the
non-profit is the Buyer)
▷ Non-Profits are not the Buyer of race registrations, they are the Seller
when they host a race
▷ Being exempt from Paying sales tax on purchases does not make you
exempt from collecting sales tax on sales
▷ A limited number of states do exempt non-profits as the Seller. RunSignup
has commissioned research to understand these exemptions and will make
them available where they exist
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8. 8
RunSignup
Taxability
Matrix
Overview of Tax Collection Responsibilities
State
Tax on Race Charge
(Admission)?
Tax on Merchandise? Tax on Memberships?
Non-Profit Sales of
Taxable Items?
Tax on Tickets (Non-
Profits)
RunSigup to Collect on Your
Behalf?
Tax on
Processing Fee?
Alabama Yes Yes No Taxable Yes Marketplace No
Alaska No No No NA No No No
Arizona Yes Yes Yes Exempt No Marketplace Yes
Arkansas Yes Yes Yes Taxable+ Yes+ Marketplace No
California No Yes No Taxable No Marketplace No
Colorado No Yes No Taxable+ No Marketplace No
Connecticut No Yes Yes Taxable* No Marketplace Yes
Delaware No No No NA NA No No
District of Columbia Yes Yes No Taxable No Marketplace No
Florida Yes Yes No Taxable No No No
Georgia Yes Yes Yes Taxable+ Yes+ No No
Hawaii Yes Yes Yes Exempt No Marketplace Yes
Idaho Yes Yes No Taxable No Marketplace No
Illinois No Yes No Exempt No Marketplace No
Indiana No Yes No Taxable* No Marketplace No
Iowa Yes Yes Yes Exempt No Marketplace No
Kansas Yes Yes No Taxable Yes+ No No
Kentucky Yes Yes Yes Exempt No Marketplace No
Louisiana Yes Yes Yes Taxable+ No No No
Maine No Yes No Taxable+ No+ Marketplace No
Maryland Yes Yes No Taxable+ Yes+ Marketplace No
Massachusetts No Yes No Taxable* No No No
Michigan No Yes No Taxable No No No
Minnesota No* Yes No Taxable* No Marketplace No
Mississippi Yes Yes No Taxable No No No
Non-Profit Notes:
Asterick (*) provide a limited exemption based on a day-count
Plus (+) provide a limited exemption either different from or in addition to an exemption based on day-count
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RunSignup
Taxability
Matrix
Overview of Tax Collection Responsibilities
State
Tax on Race Charge
(Admission)?
Tax on Merchandise? Tax on Memberships?
Non-Profit Sales of
Taxable Items?
Tax on Tickets (Non-
Profits)
RunSigup to Collect on Your
Behalf?
Tax on Processing
Fee?
Missouri Yes Yes No Exempt No No No
Montana No No No NA No No No
Nebraska No Yes No Exempt No Marketplace No
Nevada No Yes No Exempt No Marketplace No
New Hampshire No No No NA No No No
New Jersey No Yes No Exempt No Marketplace No
New Mexico Yes Yes Yes Exempt No Marketplace Yes
New York No Yes Yes Taxable+ No Marketplace No
Oregon No No No NA No No No
North Carolina No Yes No Taxable No No No
North Dakota Yes Yes Yes Exempt No Marketplace No
Ohio No Yes No Taxable* No No Yes
Oklahoma Yes Yes Yes Taxable+ Yes+ Marketplace No
Pennsylvania No Yes No Taxable No Marketplace No
Rhode Island No Yes No Taxable+ Yes+ Marketplace No
South Carolina No Yes No Exempt No Marketplace Yes
South Dakota Yes Yes No Taxable No Marketplace Yes
Tennessee Yes Yes No Taxable No No No
Texas Yes Yes Yes Taxable No Marketplace Yes
Utah Yes Yes No Exempt No Marketplace Yes
Vermont Yes Yes No Taxable+ No+ Marketplace No
Virginia No Yes No Taxable No Marketplace No
Washington No Yes No Taxable No Marketplace No
West Virginia Yes Yes No Taxable* No+ Marketplace Yes
Wisconsin Yes Yes Yes Taxable No No No
Wyoming Yes Yes Yes Taxable+ Yes+ Marketplace No
Non-Profit Notes:
Asterick (*) provide a limited exemption based on a day-count
Plus (+) provide a limited exemption either different from or in addition to an exemption based on day-count
10. What are next steps for
RunSignup and Sales Tax?
▷ Let us know if you see something off in our taxability matrix.
Include specific state statutes and/or rulings (email:
kevin@runsignup.com)
▷ Beta sales tax collection with select customers in early September
▷ Race opportunity to register non-profit exempt status with
RunSignup where applicable in September
▷ Collection and Remittance in Marketplace states by October1
▷ Collecting and Remitting to races at race option in non-
marketplace states by October 1
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12. RunSignup does not provide tax, legal or accounting
advice. This material has been prepared for informational
purposes only, and is not intended to provide, and should
not be relied on for, tax, legal or accounting advice.
RunSignup makes no representations, warranties, or
assurances as to the accuracy, currency or completeness
of the information provided in this presentation.
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