As of July 1st 2020, Kotis will now collect sales tax in every state.

Up until this point, we were only collecting in a handful of states where Kotis had a physical presence (for instance, our headquarters in Washington State or our Production and Warehousing Facilities in Ohio and Utah).

In 2018, a decision made by the Supreme Court in South_Dakota v. Wayfair ruled that states may require sales tax on purchases made from out-of-state sellers based on “economic nexus”, even if the seller does not have a physical presence in the state. This opens the door for states to collect sales tax from out of state sellers like Kotis. Since the Supreme Court ruling, many states have passed laws that establish when to collect sales tax with various conditions.  Rather than waiting to collect tax for each state until they pass an applicable law or as Kotis reaches “economic nexus”, we decided it would be easier for everyone if we created certainty by collecting more broadly in every state at the same time.

PROGRAM ACCOUNTS

The Q2 Sales Tax Report will only be based on our previous taxable states – CA, WA, UT and OH. Starting Q3, we will now collect sales tax in every state.

Keep in mind for credit card orders, the consumer pays sales tax based on the purchase price on the store, and Kotis remits that tax to the state. These orders will not show up on the quarterly report as the end consumer pays the tax.

For non-credit card orders, Kotis will continue to issue a quarterly sales tax invoice for any items shipped to taxable states. Since we cannot charge for sales tax upfront as we don’t know the final destination the product is shipping to, we wait until the end of the quarter to assess the sales tax to collect based on where shipments went. Because you already own the inventory, nothing is due for the cost of the goods themselves in this quarterly billing; the only amounts owed are for sales tax.

Upon your request, we can provide a detailed breakdown of the orders and items that are being used to calculate the tax. More information on what to expect with Quarterly Sales Tax Billing.

RESALE EXEMPTIONS

If you provide valid reseller documentation, Kotis does not need to collect sales tax from you on those shipments. Separate documentation is required for each state.