Wednesday, April 01, 2009
Last Minute Bill Attempts to Tax Remote Sales
SB 1071 would attempt to require out of state vendors to collect Maryland sales taxes if they run Internet ads on websites of Maryland businesses that result in $10,000 in annual sales. The bill was filed Monday and has been rushed to a hearing tomorrow (April 2) at 1 p.m. in the Senate Budget and Taxation Committee.
The Maryland Chamber will oppose this bill, which attempts to end run constitutional prohibitions on state sales tax nexus. As in New York, this bill could lead national vendors to cancel their relationships with Maryland businesses. The General Assembly should not hastily enact a significant tax change in the remaining one and a half weeks of the 2009 session that has had inadequate public review. Contact Ron Wineholt for further information at .(JavaScript must be enabled to view this email address) .
Thanks for the post Ron.
This law affects more than just Internet adverting. The bill would create tax nexus if: “THE SELLER ENTERS INTO AN AGREEMENT WITH A RESIDENT OF THE STATE UNDER WHICH THE RESIDENT, FOR A COMMISSION OR OTHER CONSIDERATION, DIRECTLY OR INDIRECTLY REFERS POTENTIAL CUSTOMERS TO THE SELLER, WHETHER BY A LINK ON AN INTERNET WEBSITE OR OTHERWISE;”
Nexus is established through any advertising or customer referral over any medium “BY A LINK ON AN INTERNET WEBSITE OR OTHERWISE.”