Wouldn't this system potentially hurt consumers though? If retailers have to implement complex new compliance systems, those costs will just get passed along to buyers. Plus, I imagine the definition of "production state" could get messy - what if components come from multiple states?

That's a legitimate concern about costs, but the proposal actually addresses this by building on existing systems rather than creating entirely new ones. Many retailers already use automated systems for multi-state sales tax compliance post-Wayfair. Extending these to include origin data isn't as big a leap as starting from scratch. Regarding the multi-state production issue, you're right that it complicates things. A workable approach might be to use the final assembly location or implement a proportional system based on value-add at each production stage. The automobile industry already tracks this kind of data for regulatory compliance, so there are existing models to follow.

This is exactly why I moved all my sales to Amazon last year. The compliance burden post-Wayfair was just too much for my small operation. I was spending more time on tax research than actually running my business. The irony is that marketplace facilitator laws were supposed to level the playing field, but they've pushed more of us smaller sellers onto the big platforms. If this hybrid system gets implemented, I bet even more sellers will decide it's not worth the hassle of compliance.

That's an interesting option I hadn't considered. How does the income work from something like that? Is it comparable to what you might get from a rental property? And would I still qualify if I'm coming from a partnership LLC structure?

The income from a DST is typically distributed monthly or quarterly and is generally comparable to what you might see from a rental property, usually in the 4-6% range depending on the specific trust. Many DSTs focus on stable, long-term leased properties like corporate office buildings or industrial spaces. Yes, you would still qualify coming from a partnership LLC structure, though there are some complexities to navigate. Each partner in your LLC would need to be treated as an individual investor in the 1031 exchange process. You would likely need to either dissolve the partnership before the exchange or have the partnership itself invest in the DST, depending on your specific situation and goals.

This is actually smart advice. I did something similar last year. Refinanced my rental property at 4.5% and used the cash to buy into a local business. The interest is deductible as a business expense too if you structure it right.

Thanks for bringing this up! I actually don't have any camera equipment yet - I've been using my ancient phone which takes terrible photos. The new phone would be my only photography equipment. Do you think that makes the case stronger for it being a legitimate business expense?

Yes, that definitely strengthens your case for the business expense deduction. When it's your only photography equipment and directly tied to improving your product listings, it's much easier to justify as a necessary business expense. Just make sure to keep good documentation - save your current product photos, then take new ones with the new phone to show the improvement. This before/after comparison can be extremely helpful if you're ever questioned about the business necessity. Also keep any feedback from customers or analytics showing that better photos improved your sales conversion rate.

This is super important! In the UK the VAT threshold is £85,000 - are you anywhere near that with your Amazon sales? If not, you probably aren't VAT registered yet.

Thanks for the suggestion! Did H&R Block handle your multi-state situation well? I've heard mixed things about them for more complicated situations.

They did okay with my multi-state stuff, but I had to be really proactive and double-check their work. The person I got was relatively new and missed allocating some of my income correctly between states at first. After I pointed it out, they fixed it, but it made me wonder what else might have been missed if I hadn't been paying attention. If you go with H&R Block or similar, try to get their more experienced preparers and ask specifically about their experience with multi-state returns and early retirement withdrawals. The quality really varies depending on which preparer you get assigned to.

Is there anything the OP could do to reduce the cost? Maybe organizing documents in a specific way or doing some of the prep work themselves?

My brother tried to do a 1031 exchange last year and it was a complete nightmare with all the timing restrictions. Make sure you have a qualified intermediary lined up BEFORE you sell if you go this route!

THIS! My cousin sold some "worthless" land in Wyoming to a mining company for what seemed like a great price, only to find out later they discovered a major lithium deposit. Do your homework before selling!

Oh wow, I hadn't even thought about that! I was just excited about getting money for land I thought was worthless. Maybe I should look into what exactly they're mining for and get a second opinion on the value. Thanks for bringing this up - definitely don't want to get taken advantage of!