Research Tax Memo

Research Memo A:Hint: Fact patterns are based on a recently decided tax case
Fact Pattern #1
The legislature in the State of Red enacted a new law requiring out-of-state sellers to collect and
remit sales tax on the retail sales of goods and services in the State. Sellers are required to collect
and remit the tax to the State, but if they do not then in-state consumers are responsible for
paying a use tax at the same rate. The Act covers only sellers that, on an annual basis, deliver
more than $150,000 of goods or services into the State or engage in 200 or more separate
transactions for the delivery of goods or services into the State. Your client is a B-etsy online
retailer with no employees or offices in the State of Red and, therefore, has not collected any
sales tax under the new Act. Your client has received a notice from the State of Red requiring
your client to register for a license to collect and remit the sales tax. A refusal to do so will result
in your client being prohibited from online sales of any goods or services in the State. Your
client wants to know if the business must comply with the sales tax requirements of the State of
Red. Also, what implications might this have in other states where your client does business
online?
Prepare a tax memorandum for use in advising your client. State the issue(s) to be resolved and
make sure to identify the specific authorities (code, statutes, case law etc.) that address your
client’s tax issues. Make sure to weigh authorities both for and against your client’s position.
The memo should be 2 pages, double spaced, one-inch margins, 12pt.
Hint: search engine words “online seller” “sales tax” “court decision”
Research Memo A:
Hint: Fact patterns are based on a recently decided tax case
Fact Pattern #1
The legislature in the State of Red enacted a new law requiring out-of-state sellers to collect and
remit sales tax on the retail sales of goods and services in the State. Sellers are required to collect
and remit the tax to the State, but if they do not then in-state consumers are responsible for
paying a use tax at the same rate. The Act covers only sellers that, on an annual basis, deliver
more than $150,000 of goods or services into the State or engage in 200 or more separate
transactions for the delivery of goods or services into the State. Your client is a B-etsy online
retailer with no employees or offices in the State of Red and, therefore, has not collected any
sales tax under the new Act. Your client has received a notice from the State of Red requiring
your client to register for a license to collect and remit the sales tax. A refusal to do so will result
in your client being prohibited from online sales of any goods or services in the State. Your
client wants to know if the business must comply with the sales tax requirements of the State of
Red. Also, what implications might this have in other states where your client does business
online?
Prepare a tax memorandum for use in advising your client. State the issue(s) to be resolved and
make sure to identify the specific authorities (code, statutes, case law etc.) that address your
client’s tax issues. Make sure to weigh authorities both for and against your client’s position.
The memo should be 2 pages, double spaced, one-inch margins, 12pt.
Hint: search engine words “online seller” “sales tax” “court decision”