Meeting Mentor Magazine

November 2024

3 Essentials Planners Need to Know
About New U.S. Sales Tax Rulings

If you sell conference or event registrations online, congratulations! You have joined the ranks of online retailers such as giant consumer goods seller Wayfair.com. But that means that the South Dakota v. Wayfair case settled by the Supreme Court this summer may apply to you, as well.

The case overturned a 20-year-old ruling that online retailers only had to pay sales and use taxes in states where they had a physical presence. Now, anyone who sells any goods or services online — even event organizers and even if they are selling through event registration software or third-party partners — no longer needs to have a physical presence in the state that will host the event in order to be legally obligated to collect sales tax from registrants and remit the taxes to the host state.

Because the Supreme Court left it up to individual states to set tax rates and decide exactly what items are taxable in their state, figuring out what you need to do is a fast-moving, complex task. And, just to make it even more confusing, each county within each state also can set its own tax rate — there currently are more than 5,000 different tax rates in the U.S. Some states may only require certain types of events to collect and remit sales and use taxes; some may not require events to collect sales taxes at all.

What’s a planner to do? Put your tax advisor on speed dial, sit down with your accountant over a cup of coffee, and get to know your event’s host-state revenue and taxes website. But first, check out these suggestions from tax expert Stephen Cummings of Nomad Financial, provided during a webinar hosted by event management software provider Swoogo.

1. Learn the sales and use tax rules of the state in which your event will be held. If you sell registration or other goods or services on site, you’re likely already doing this, but if not, add it to your to-do list for online registration sales. First, find out if your host state’s sales and use tax even applies to your event type. Some states have ruled that sales and use tax applies to all events, others just apply sales tax to certain types of events, and yet others exempt events from sales tax altogether. Whether your online registration is subject to state sales taxes also can depend on whether the meeting is a one-off or one that you will hold repeatedly in the state. “It varies state by state by state,” Cummings said.

If your event will be taking place in one of the states that has not yet issued final rulings, you may get a pass for now. You also may get a pass if your event does not meet your host state’s minimum economic threshold. Those that have issued final rules have set annual revenue thresholds ranging from $10,000 in some states to $500,000 in others, with most landing in the $100,000 to $250,000 range to date. Most states with final rulings also include transaction thresholds of 200,0000 per month.

Then drill down to the county level to find out what the exact tax rate will be. “The only thing that’s consistent at the state level is what is taxable,” Cummings said. “If the state says your event is taxable, it will be taxable throughout the state; the rate at which it is taxed will vary by county.”

2. Check how you invoice your registration packages. Also find out what the state tax rules are on merchandise, because even if your event doesn’t fall under state sales tax rules, the merch might. This means that $10 T-shirt you throw in with the online platinum registration package could cause the whole $1,000 package to become subject to state sales tax if you don’t break the swag out on the invoice and apply the sales tax separately, said Cummings.

3. Talk with your registration software provider. Are they aware of the potential repercussions from the Wayfair ruling for event organizers? Are they able to separate line items for taxable and nontaxable items on the event registration invoice?

Swoogo offers a downloadable PDF state-by-state sales tax guide of gross receipt thresholds, threshold transactions, dates the rules go into effect, and links to the appropriate website in each state (free registration required). — Sue Pelletier

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About ConferenceDirect
ConferenceDirect is a global meetings solutions company offering site selection/contract negotiation, conference management, housing & registration services, mobile app technology and strategic meetings management solutions. It provides expertise to 4,400+ associations, corporations, and sporting authorities through our 400+ global associates. www.conferencedirect.com

About MeetingMentor
MeetingMentor, is a business journal for senior meeting planners that is distributed in print and digital editions to the clients, prospects, and associates of ConferenceDirect, which handles over 13,000 worldwide meetings, conventions, and incentives annually. www.meetingmentormag.com

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