Question

Please refer to the attached file

II. Read the Supreme Court decision on Online retailers collecting sales tax and write a letter to your client Tara Taylor, the owner of Tara's Treasures, explaining how the new decision will affect her business. Tara Treasures sells Jewelry online in all fifty states. Feel free to do additional research on the Supreme Court Ruling

Answer 1

Alfred Woods

Attorney at Law

65-21 main Street

Flushing, New York 11367

(7180340-4200)

December 01, 2018

Tara Tylor

Tara's Treasures

885 Seventh Avenue

New York, New York 10017

Dear Ms. Tara,

I hope you’ve been well. Recently there has been some changes in the State’s taxation policies for the online retailers, therefore as your Attorney its my duty to make my client aware of all the necessary changes that have occurred regarding this matter. As I know that you’ve been in the online retailing business for the past 7 years and your scale of operations covers all the 50 states, but scenarios have changed now and they won’t be the same as they used to be in the past. Here are few necessary details that I think is necessary for you to acknowledge regarding trading it online industry.

Previously there was a different law regarding the collection of the sales tax in online retailing which deals with the ability of states to collect sales tax from internet transactions and mainly revolved around the notion or physical connection or nexus to a state. In other words, only those merchants were required to collect sales tax from if they had a physical presence, such as a store, office or warehouse, in the state in which the customer resides. For example, if an online retailer was located in Florida and sold goods to a consumer in Iowa, where it did not have a physical nexus or connection to (no office, employee, or other physical connection), the online retailer would not have the responsibility to collect sales tax from that transaction. But the recent 5-4 Supreme Court decision in South Dakota v. Wayfair Inc., gave the most significant ruling on the subject of internet sales tax which held a decision and ordered South Dakota to change its law to require all e-commerce sites to collect the sales tax, regardless of whether they have a physical presence. The law did carve out an exemption for small merchants – those with fewer than 200 customers in the state annually or sales below $100,000.

This new decision is going to impact the online retailing capabilities of a number of online retails no matter how big or small they are. As now they are supposed to collect the sales tax as well from their customers regardless of their place of residence. It will definitely be affecting the demand and supply capabilities of customers as well as the online retailers. To sum up, based on the facts as I have recited them in this letter, I would like you to keep a close check on the market these days as after this revolutionary decision the stock market has already began to show its impact.

I hope this is helpful, and would be happy to discuss this matter with you further. Please feel free to call my office at (718) 340-4200 if you have questions, or would like to set up a time to meet.

Very truly yours,

Alfred Woods