It is imperative for RRCA members to understand how the landmark Supreme Court decision of South Dakota v. Wayfair of 2018 will impact events as it relates to sales tax.
(Moorestown, NJ)– RunSignup is rolling out their new sales tax functionality throughout this month, addressing the dynamic changes in sales tax laws and making it easier for races to stay in compliance with their state laws. The release will be gradual, beginning with the first five states (Florida, Michigan, Tennessee, Kansas, and Missouri) yesterday, November 12, 2019. All states are expected to have sales tax functionality in early December.
The new sales tax system is a response to a wave of changes to state sales tax laws following the landmark Supreme Court decision on South Dakota v. Wayfair, Inc in 2018, which changed the way in which online sellers are treated in regard to sales tax.
Tax laws are exceptionally complicated, and RunSignup cannot provide tax, legal, or accounting advice. However, they have worked with professionals to prepare a taxability study indicating what they believe is taxable of the common items sold on the site (such as registrations, merchandise, memberships, and processing fees). This complex set of rules is built into the sales tax system to help take the guesswork out of sales tax collection and reduce their potential liability.
With the new ruling, two groups of states have emerged:
Marketplace States are those with laws that require an online entity such as Amazon, Wayfair, or RunSignup (and other registration companies) to collect and remit sales tax on behalf of the sellers (or races) on their platform. By the beginning of 2020, this group will contain 38 states. When the sales tax system is fully released, RunSignup will be required to collect and remit sales tax for all Marketplace States.
Non-Marketplace States are those in which the online entity (like RunSignup) is not required to collect or remit sales tax for an event. However, in some of these states, the race is still responsible for sales tax collection and payment. In Non-Marketplace States, races will be able to choose if they want to use the sales tax system to calculate the taxes they should be collecting, but will be responsible for remitting the taxes.
Bob Bickel, CEO and Founder of RunSignup said, “In the aftermath of the Wayfair case, we felt that we had a responsibility to take a leadership position in the endurance industry. Races who are not correctly collecting sales tax are in jeopardy of owing back taxes and the new sales tax system will help them to comply with their state’s laws. Additionally, by complying with the new Marketplace Laws and remitting on behalf of the races in those states, RunSignup ensures that those customers will not get ensnared in any legal or financial fallout from non-compliance. At the end of the day, it’s all about mitigating risk for our customers.”
The roll-out of the new sales tax system began with a release in five Non-Marketplace States (Florida, Michigan, Tennessee, Kansas, and Missouri), where races can now opt-in to use the system. The first Marketplace States, Washington and South Carolina, are expected to be released during the week of November 18, with the remainder of Non-Marketplace States being turned on before Thanksgiving and all states fully released in early December. In some states (but not all), nonprofits are exempt; any exempt nonprofits will have until December 15, 2019 to specifically setup the exemption within the system.
For more information about the new sales tax system on RunSignup, review the Sales Tax Policies, the Implementation Details, and their Sales Tax Webinar.
RunSignup is the leading all-in-one platform for endurance and fundraising events. More than 20,000 races, supporting over 8,000 nonprofits, use RunSignup's free and integrated solution to save time, grow their events, and raise more. Built on a powerful CRM, RunSignup delivers the art of technology to power the entire race cycle, with promotional tools, registration, a full fundraising platform, and a suite of RaceDay products – including the runner-tracking app RaceJoy and race timing software, RaceDay Scoring. For more information, visit www.runsignup.com