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ChapterTitleEducation
state sales taxes – such as "Tax Free Tuesday." In any given
online shopping cart, the taxes will be different for each
product. Diapers and cigarettes are not taxed at the same
rate.
Once upon a time, keeping track of all 13,000 tax rates
and how they apply to myriad individual products was
impossible for an ordinary retailer. So, in 1967, the Supreme
Court didn't see the need to enforce tax collection that was
virtually impossible.
However, now it's 2014, and looking up a tax rate for
a product and location in real time couldn't be easier.
TaxCloud, an MFA-related startup, does it for free at
https://taxcloud.net. It is one of a handful of Certified
Legal ease Service Providers (CSPs) designed to help processors and
merchants comply with the MFA.
The MFA: What payment When the MFA becomes law, merchants will be scrambling
to sign up and integrate with CSPs like TaxCloud. The CSP
pros must know in 2014 will: • Integrate with merchant shopping carts and
By Adam Atlas provide real-time tax lookup on each purchase
Attorney at Law • Bill the merchant via automated clearing house at
the end of the month for all tax collected
• Remit the tax to each state for which it was
t is highly likely online merchants will have to col- collected
lect state and local sales taxes starting this year. The
purpose of this article is to give ISOs and merchant • Help the merchant file the necessary paperwork
I level salespeople (MLSs) critical information in with each state
advance of this paradigm change in payment processing. Why should ISOs care now?
What is the MFA? ISOs and MLSs should be relieved that the MFA did not
The Marketplace Fairness Act (MFA) is a yet to be become law in 2013 because that is likely going to give
adopted federal law that would effectively require online them a few more months to prepare for the deluge of
merchants to collect the sales tax applicable on their sales. merchant requests for help with compliance. Payment
In most cases, the amount to be collected is the sales tax professionals should be on top of this issue now because
applicable to the product where the buyer is located. For those who do will be seen by their merchants as ahead of
example, if your merchant sends fruit baskets from Florida the issue and not playing catch-up when the MFA becomes
to a buyer in Topeka, Kan., the sales tax due on the sale law – perhaps this coming spring or summer.
would include the Kansas state sales tax, Shawnee County
sales tax and the Topeka sales tax on fruit baskets. As soon as the MFA becomes law, processors will be
instantly separated into two camps: those who can help
The MFA overwhelmingly passed the U.S. Senate during merchants comply and those who can't. ISOs and MLSs
2013 and is now pending in the House of Representatives. It can act now to demand of their processors an MFA
may surprise you to learn that the MFA enjoys considerable integration plan. This is primarily a customer service issue
bipartisan support. This is because it is not a new tax bill; for the acquiring sphere. And like so many service issues,
it would result in the collection of taxes already owed. it will ultimately become the basis for sales and merchant
migration from one platform to another.
Republicans have supported initiatives to collect existing
taxes – such as the MFA. Needless to say, main street Naturally, some merchants will be reluctant to collect tax
retailers are largely in support of the MFA because, since that is not yet expressly mandated for collection. Those are
they must collect sales tax, they often have to charge 6 or not your best merchants. Your best merchants will want
7 percent more than their online competitors for the same to integrate with a CSP long before the MFA becomes law
product. so that there will be no glitches when the law is adopted.
How would it work? I believe ISOs and MLSs that partner with MFA-compliant
processors will lead the pack in 2014. As you know,
There are over 13,000 tax jurisdictions in the United States. every piece of industry compliance or regulation, like
These are all subject to change once in a while – at the state, the Payment Card Industry (PCI) Data Security Standard
county and city levels. There are also temporal changes in (DSS), tax identification number (TIN) matching, etc., leads
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state sales taxes – such as "Tax Free Tuesday." In any given
online shopping cart, the taxes will be different for each
product. Diapers and cigarettes are not taxed at the same
rate.
Once upon a time, keeping track of all 13,000 tax rates
and how they apply to myriad individual products was
impossible for an ordinary retailer. So, in 1967, the Supreme
Court didn't see the need to enforce tax collection that was
virtually impossible.
However, now it's 2014, and looking up a tax rate for
a product and location in real time couldn't be easier.
TaxCloud, an MFA-related startup, does it for free at
https://taxcloud.net. It is one of a handful of Certified
Legal ease Service Providers (CSPs) designed to help processors and
merchants comply with the MFA.
The MFA: What payment When the MFA becomes law, merchants will be scrambling
to sign up and integrate with CSPs like TaxCloud. The CSP
pros must know in 2014 will: • Integrate with merchant shopping carts and
By Adam Atlas provide real-time tax lookup on each purchase
Attorney at Law • Bill the merchant via automated clearing house at
the end of the month for all tax collected
• Remit the tax to each state for which it was
t is highly likely online merchants will have to col- collected
lect state and local sales taxes starting this year. The
purpose of this article is to give ISOs and merchant • Help the merchant file the necessary paperwork
I level salespeople (MLSs) critical information in with each state
advance of this paradigm change in payment processing. Why should ISOs care now?
What is the MFA? ISOs and MLSs should be relieved that the MFA did not
The Marketplace Fairness Act (MFA) is a yet to be become law in 2013 because that is likely going to give
adopted federal law that would effectively require online them a few more months to prepare for the deluge of
merchants to collect the sales tax applicable on their sales. merchant requests for help with compliance. Payment
In most cases, the amount to be collected is the sales tax professionals should be on top of this issue now because
applicable to the product where the buyer is located. For those who do will be seen by their merchants as ahead of
example, if your merchant sends fruit baskets from Florida the issue and not playing catch-up when the MFA becomes
to a buyer in Topeka, Kan., the sales tax due on the sale law – perhaps this coming spring or summer.
would include the Kansas state sales tax, Shawnee County
sales tax and the Topeka sales tax on fruit baskets. As soon as the MFA becomes law, processors will be
instantly separated into two camps: those who can help
The MFA overwhelmingly passed the U.S. Senate during merchants comply and those who can't. ISOs and MLSs
2013 and is now pending in the House of Representatives. It can act now to demand of their processors an MFA
may surprise you to learn that the MFA enjoys considerable integration plan. This is primarily a customer service issue
bipartisan support. This is because it is not a new tax bill; for the acquiring sphere. And like so many service issues,
it would result in the collection of taxes already owed. it will ultimately become the basis for sales and merchant
migration from one platform to another.
Republicans have supported initiatives to collect existing
taxes – such as the MFA. Needless to say, main street Naturally, some merchants will be reluctant to collect tax
retailers are largely in support of the MFA because, since that is not yet expressly mandated for collection. Those are
they must collect sales tax, they often have to charge 6 or not your best merchants. Your best merchants will want
7 percent more than their online competitors for the same to integrate with a CSP long before the MFA becomes law
product. so that there will be no glitches when the law is adopted.
How would it work? I believe ISOs and MLSs that partner with MFA-compliant
processors will lead the pack in 2014. As you know,
There are over 13,000 tax jurisdictions in the United States. every piece of industry compliance or regulation, like
These are all subject to change once in a while – at the state, the Payment Card Industry (PCI) Data Security Standard
county and city levels. There are also temporal changes in (DSS), tax identification number (TIN) matching, etc., leads
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