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The Supreme Court’s Wayfair decision, which lets states tax online sales, is going to have an impact across the indirect tax market, according to Scott Peterson. Peterson, director of government affairs for Avalara, said this month the decision will force all levels of government to rethink taxes.

Peterson said one area that will be rethought is the lodging taxation. “Lodging taxes are historically imposed on the operator of the facility,” Peterson said at Avalara’s Crush conference this month.

That means that Airbnb does not pay taxation on lodging booked through its services as it does not operate facilities. He said that this change, which needs to be accomplished at the city level, should “impose the tax on the person who has the money which will be Airbnb and Expedia,” Peterson said.

The decision is already having an impact on Avalara’s business. As states adopt economic nexus, businesses are looking for assistance in meeting the changing environment. ”We have seen a significant increase in new customer’s registering," Avalara's CEO Scott McFarlane said during this month’s webcast for earnings for the first quarter ended March 31. 

The demand helped Avalara slash its loss and boost revenue. For the most recently ended quarter, it lost $9.2 million, 39.4 percent lower than the loss of $15.2 million a year ago. Revenue for period was slightly less than $85 million, up 38.4 percent from $61.3 million in last year’s corresponding period. 

Bob Scott
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind
Last modified on Tuesday, 14 May 2019
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