Next-Gen Sales Tax

Trending: Close But No Cigar? What Local Sales Tax Laws Mean For Tobacco eSellers

Countries around the globe are launching new digital sales taxes in efforts to improve their revenue streams and create more balanced business environments for domestic brick-and-mortars and foreign eCommerce marketplaces. Global consensus over how such tax policies should be enacted has yet to materialize, however, and disagreements among laws create confusion and greater compliance work for businesses.

India, the European Union and a number of U.S. states require eCommerce marketplaces to remit sales tax for sellers on their platforms, for example, while a growing share of governments are instead placing such burdens on financial institutions (FIs). These companies are requiring banks to remit taxes for online purchases customers make with cards that the FIs have issued.

The September Next-Gen Sales Tax Tracker details the latest developments on digital sales tax policies, new eCommerce tax law announcements and more.

Around the Next-Gen Sales Tax world

Nigeria recently became one of the latest countries to mull over adopting a policy that would place responsibility on banks for collecting value-added tax (VAT) for online purchases. The country has proposed imposing a 5 percent VAT on eCommerce sales, partially out of a desire to expand the governments’ tax base beyond dependence on the crude oil industry.

France received pushback when it recently announced that it would require major online companies to pay tax on revenue gleaned from French residents’ digital activities. The U.S., in response, threatened a variety of retaliatory taxes. The two countries recently came together, however, and reached an agreement under which France’s law will stand until the international body, the Organisation for Economic Co-operation and Development (OECD), develops global tax norms that France will then adopt.

Angel Gurría, OECD secretary-general, recently discussed this group’s efforts to create a global digital sales tax norm. The body is investigating a variety of related questions, including which entities should have rights to levy such digital taxes, how to ensure that jurisdictions do not lose significant amounts of their tax bases due to any new eCommerce tax policies and how to address new digital economy concepts when making tax policies.

Find more on these and all the latest headlines in the Tracker.

The Unexpected Impacts Of Economic Nexus Laws On Restricted Substances Retailers

Economic nexus laws may not actually be leveling the playing field in the tobacco industry, according to Pierre Rogers, founder of luxury cigar
marketplace PuroTrader. In this month’s feature story, Rogers explains why the complexities of that sector mean that digital sales tax laws could actually help large eCommerce companies continue to dominate over mom and pops. Plus, Pierre explains what it takes to stay current and compliant as new economic nexus laws continue to roll out.

Find the full story in the Tracker.

Deep Dive: The Tax Impact Of A No-Deal Brexit

Britain could very well leave the EU without a deal in place. If that happens, it would cause new tariffs and VAT to be implemented immediately to trade between the UK and EU. Countries like Ireland are working to prepare for impacts, such as a sudden surge in customer processing, and businesses are readying to expect new tax compliance obligations. The Deep Dive examines what a no-deal Brexit could mean for global eCommerce sales taxes.

Find the full story in the Tracker.

About the Tracker 

The Next-Gen Sales Tax Tracker, done in collaboration with Avalara is your go-to monthly resource for updates on trends and changes in the world of eCommerce sales tax.



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.