Business owners in Connecticut have a lot that they have to worry about when it comes to taxes. Lawmakers are considering a change that will give them even more to stress over. According to a recent article, there is a bill currently under review that includes a provision for real-time sales tax collection. How would that work and at what cost?
An excerpt from the bill basically says that business owners who utilize credit card services for payment will need to have the companies processing those payments pay sales tax directly to the state almost immediately. It says specifically that they will be given 24 hours to send the sale tax owed on any given electronic payment. This real-time sales tax collection, if it is passed, would take effect in July 2019. This gives business owners very little time to prepare.
While this may seem like a good way to streamline the way sales tax is collected, it is not something credit card companies or business owners have the equipment to do. Other states have considered similar policies but, ultimately, decided against it. Real-time sales tax collection might give the state a small tax gain each year, but it would cost far more to implement this type of system and keep it running. At the end of the day, many believe it will hurt the state more than it will help and some say that the technology to do this does not even exist.
Only time will tell if real-time sales tax collection will become a reality in Connecticut. If it does, business owners will likely have a number of questions about how this may affect their taxes and they may even run into problems if, for some reason, the sales tax is not sent on time. An experienced tax attorney can answer any sales tax questions one might have and offer further assistance if an issue arises.