Australian fashion retailers selling into the United States through online channels could be forced to pay state-by-state sales taxes after a ruling by the US Supreme Court.
The South Dakota v. Wayfair, Inc. ruling will enable all states across the US to impose sales taxes on purchases from online retailers, even if that company does not maintain a physical presence in the state.
Australian retailers are being warned to review their requirements under US tax laws to ensure that their ecommerce platforms can deal with various state laws in the coming months.
With 45 states in the US currently collecting sales taxes with vastly different laws and rates per state, retailers are also being implored to consider pricing implications for their online platforms in the country.
Tryzens CEO said the ruling could have serious implications for Australian fashion retailers looking to expand their operations into the US.
“Retailers will need to more through due diligence on how to accommodate these changes relating to 'remote sellers' as the picture evolves over time.
“Whilst there is still a lot of ambiguity about how this will work in practice, Australian retailers that sell in to the US would do well to start preparing for the changes ahead.
“45 states in the US collect sales taxes, and, to make things more complicated still, sales tax rates differ from state-to-state.
“Australian fashion retailers will need to ensure that these differences are accommodated for in their ecommerce platforms as well as considering price implications due to the variability of the rates by state to stay on the right side of the IRS!”