Two Additional States Poised with Tattletale Sales Tax Bills

Two more states have passed "tattletale" statutes for out of state sellers, both of which have been sent on for signatures by each state's governor. Both are based roughly on the Colorado law that the Tenth Circuit panel which included Neil Gorsuch found acceptable under federal law and which SCOTUS refused to hear an appeal related to.

Georgia's law (House Bill No. 61) will apply if you sell more than $200,000 into the state or have more than 200 transactions with buyers in the state. The penalties are more in line with standard information return penalties so this one is less of a problem (the 200 transaction issue is likely to trip up more sellers than the $200,000 in sales unless a seller has average online invoices of $1,000+).

Oklahoma's statute (Oklahoma Bill No. 1019) is a bit interesting in that it applies to referrers in addition to marketplaces and remote sellers. As I read the bill, if you have a referral link on your site (for the affiliate money) you will be stuck with giving notices even though you only get paid the commission when the sale goes through.

As well, its trigger is at the state of Washington $10,000 level which makes its title as the "Amazon" bill somewhat questionable--a trigger well above $10,000 would have caught Amazon's marketplace, so that lower level is meant to go after much smaller fish (including referrers). The penalty is not as draconian as Washington's, but it is set at 20% of sales or $20,000, whichever is less, so it's also a lot higher than Georgia's for most sellers. The testing year runs from July 1 to June 30 and this starts this July. The bill also passed both chambers of the Oklahoma legislature with minimal opposition.

Justice Gorsuch's observation when he heard the case as a Tenth Circuit panel member that we can expect many more, if not all, states with a sales tax to adopt a Colorado style tattletale provision seems to be on its way to being proven true.

Remember that these statutes should continue to function just fine even if the Supreme Court holds for Wayfair when that opinion is released later this year.