Due to a recent US Supreme Court decision, sales tax rules on interstate commerce are changing. This means that very soon Milwaukee Electronics, including divisions Screaming Circuits, San Diego PCB Design and Automation Controls Group, will need to collect sales tax on all shipments into US states that we are registered to collect tax in. This impacts sales conducted over the Internet as well as non-Internet business. It impacts products we manufacture and services we provide. Organizations that are exempt from payment of sales tax will need to present proof of exemption.
Prior to this ruling, anyone in states that levy a sales tax was responsible for reaching out to their state and paying any sales tax liability directly unless Milwaukee Electronics had some form of physical presence in the state (for example, our Screaming Circuits division has been collecting California state sales tax for a while now due to the presence of California based sales reps).
The US Supreme Court ruling has already taken effect, and that effect is that individual states are able to define their own economic nexus based on a specified level of business activity.
As a result of the Supreme Court decision, individual states can now set their own definitions of economic nexus. We at Milwaukee Electronics, and divisions, are responsible for collecting taxes in states where we meet or exceed the economic nexus threshold. This applies to any business transaction with product shipping or services provided to those states, and the tax and liability is based on the shipping destination. None of this applies if your order is shipped to destinations outside the USA.
If you are exempt from paying sales tax, you can provide an exemption certificate from your state(s). Customers working with our Milwaukee, Tecate, San Diego and ACG branches, please send certificates to “AR.Milwaukee@MilwaukeeElectronics.com” Portland EMS customers, please send certificates to “AR.Portland@MilwaukeeElectronics.com.” Use the email subject line: “Tax Exemption Certificate.”
The short of it:
- Starting very soon, Milwaukee Electronics, Screaming Circuits, San Diego PCB Design and Automation Controls Group will be collecting sales tax for all deliveries to states in which we are registered to collect sales tax.
- If you are exempt from paying sales tax, please send us a copy of your tax exemption certificate(s) for any states that you have us ship product or deliver services to.
- It is based on where we ship the boards or provide the service, not necessarily where you live.
You can read all 40 pages of the Supreme Court ruling here: https://www.supremecourt.gov/opinions/17pdf/17-494_j4el.pdf
Please note that we can not give legal advice on this matter nor can we help you acquire the certificate from your state(s). If you have more questions about how this affects doing business with us, please contact your program manager or customer service representative.
It can be rather complicated. The sales tax exemption and charge is based on where the boards are shipped. For example, if you live in Seattle, Washington and have the assembled boards delivered to yourself, you will need to have an exemption certificate from Washington state or pay sales tax at Seattle, Washington rates. (The rate calculation goes down to the zip code in many cases) If you live anywhere else, like Oregon, and have your boards shipped to Seattle, Washington, you will pay Seattle tax or need a Washington exemption certificate. If you ship to multiple states, you may need an exemption certificate for each state.
For services such as DFM, design or layout provided by our San Diego PCB Design or our Innovation Design Group, there are a handful of states that tax services. If you are located in Hawaii, South Dakota, New Mexico or West Virginia, you will need to provide a tax exemption certificate, or we may have to add sales tax to the invoice.
Oregon, Montana, Alaska, New Hampshire, and Delaware do not currently have a state tax so if your boards are being shipped into one of those states, you are in the sales-tax clear at this moment. No tax will be collected and no exemption certificate will be needed for shipments into those states. If anything changes with these sates, we will let you know.
This court ruling covers more than just the Internet. While our Screaming Circuits division business is largely conducted through an e-commerce website, a good portion of it takes place in the realm of phones and email. These tax changes cover all of both online and offline transactions.
We don’t have an exact implementation schedule yet, but it will happen within the next few months. We are collecting the exemption certificates now, so if you have or can get one, please do so as soon as possible and email it to us at the address listed above.
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