RI: Sellers reminded of collect or report requirement Post-Wayfair

The Rhode Island Department of Revenue’s Division of Taxation recently issued a statement on the South Dakota v. Wayfair decision. The statement notes that “last week’s U.S. Supreme Court decision means that a state can require a retailer to collect and remit the state’s sales tax – including online retailers that have no physical presence in the state.”

Under a Rhode Island law enacted in 2017, any non-collecting retailer that has in the immediately preceding calendar year (1) over $100,000 of taxable sales of tangible personal property, prewritten computer software, or taxable services delivered into Rhode Island, or (2) over 200 of such sales transactions must comply with certain use tax reporting requirements or register to collect and remit sales and use tax. The recently-issued statement reminds taxpayers of this obligation and confirms that for non-collecting retailers, the choice to either collect or report is still available. The five reporting requirements that apply to a non-collecting retailer are as follows:

1. Post a conspicuous notice on its website that informs in-state customers that sales or use tax is due on certain purchases made from the non-collecting retailer and that Rhode Island requires the in-state customer to file a sales or use tax return.
2. At the time of purchase, notify Rhode Island customers of the same information specified on the website notice.
3. Within forty-eight hours of the time of purchase, notify Rhode Island customers in writing of the same information.
4. On or before January 31 of each year send a written notice to all Rhode Island customers who have cumulative annual taxable purchases from the non-collecting retailer totaling $100 or more for the prior calendar year. The notification must show the name of the non-collecting retailer, the total amount paid by the in-state customer to the non-collecting retailer in the previous calendar year, and if available, the dates of purchases, the dollar amount of each purchase, and the category or type of the purchase, including whether the purchase is exempt or not exempt from Rhode Island sales and use tax. The notification must (1) include other information that the Rhode Island Division of Taxation (Division) may require by rule and regulation; (2) state the same information as required on the notices described above; and (3) be sent separately by first-class mail and include the words "Important Tax Document Enclosed" on the exterior of the mailing.
5. By February 15 of each year, a non-collecting retailer must file with the Division an “attestation” that the non-collecting retailer has complied with the requirements described above.

Please stay tuned to TWIST for future Wayfair responses.