Shaheen, Hassan press tax software makers on their post-Wayfair products
In letter, they seek answers on cost and accuracy
New Hampshire’s U.S. senators, Jeanne Shaheen and Maggie Hassan, are joining with Oregon’s senators in calling on firms that produce sales tax compliance software to address questions about the accuracy and affordability of their products.
The senators, who come from two states that don’t have a general sales tax, say the information is essential in the wake of the U.S. Supreme Court’s 2018 Wayfair decision, which allowed states and other jurisdictions with sales taxes to collect taxes on sales made in other states and jurisdictions.
In a letter written along with Oregon’s Ron Wyden and Jeff Merkley, the four Democratic senators asked the software makers to be “to clarify several outstanding questions regarding the affordability and accuracy of your products. “In the letter – sent to Sovos Compliance, TaxJar, Thomson Reuters, Vertex, Avalara, Bloomberg and PricewaterhouseCoopers – the senators said they are seeking information related to the typical cost of their products, potential errors made by the software, and what the companies do to ensure that small businesses are not liable for any software mistakes.
They said small businesses are finding it difficult to navigate the variety of complex standards imposed by what they said are 10,000 different sales tax jurisdictions in the U.S. They said small businesses have concerns about potential tax penalties if these software products make mistakes.
“We share these small businesses’ concerns about the high costs of software products that purport to help these small sellers satisfy their obligations to collect and remit state and local sales taxes,” they wrote. “Further, we are concerned about small sellers’ exposure to financial liability if and when sales tax compliance software makes errors in calculating sales tax collection obligations, or otherwise uses inaccurate information regarding divergent state and local nexus standards, sales thresholds, tax bases, tax rates, or filing requirements.”
The four senators also have reintroduced legislation that would stop jurisdictions with a sales tax from creating red tape for small businesses as a result of the Wayfair ruling. They also have joined with U.S. Sen. Jon Tester, D-Mont., in reintroducing the Stop Taxing Our Potential Act to overturn the Wayfair decision.