Sales tax collection requirements are changing for online marketplaces like RunSignup. A Supreme Court ruling and new state laws allow states to require platforms to collect and remit sales tax on behalf of third-party sellers, even without a physical presence in the state. RunSignup is updating its systems and processes to comply with these new rules in the states that have passed marketplace facilitator laws, and to give races tools to manage sales tax collection in other states. This will involve determining what items are taxable, setting up tax collection and reporting for races, and rolling out changes over the next few months.

1. Sales Tax is Coming!

2. RunSignup does not provide tax, legal or accounting advice. This
material has been prepared for informational purposes only, and
is not intended to provide, and should not be relied on for, tax,
legal or accounting advice. RunSignup makes no representations,
warranties, or assurances as to the accuracy, currency or
completeness of the information provided in this presentation.
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3. The Sales Tax Environment is Changing
Quickly
▷ South Dakota v. Wayfair (June 2018)
▷ Cleared the way for states to charge sales tax on interstate purchases
▷ Put teeth into the concept of economic nexus
▷ Did not make anything new taxable, only allowed states to collect sales tax on
interstate sales
▷ Marketplace Facilitator Laws
▷ New state laws that compel platforms that facilitate sales (Amazon & Others) to
collect and remit sales tax on behalf of their sellers
▷ Currently 37 states have marketplace facilitator laws. Experts predict 45 states with
sales tax will have a marketplace facilitator law within another year
▷ RunSignup and other platforms that facilitate the sale of registrations and tickets for
sellers will need to comply
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4. What is Nexus?
▷ Nexus describes the connection between a state and a business
▷ Having Nexus is generally required to compel the collection and
remittance of sales tax
▷ Physical Nexus – Maintaining an office or other facility or having
an employee operating in the state
▷ Economic Nexus – SD v. Wayfair empowered economic nexus
statutes, minimum $ amount of sales or transactions into a state
can establish Nexus
▷ Marketplace Laws are Overriding Nexus Considerations
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5. What is RunSignup doing about
sales tax?
▷ Commissioned Sales Tax Study
▷ Determined what common items sold by races and RunSignup are taxable in what states
(taxability matrix)
▷ Determined in what states RunSignup will collect and remit on behalf of races (marketplace
facilitator) and in which states races will make their own decisions on where to collect and
remit
▷ Updating RunSignup platform sales tax functionality:
▷ Incorporating item taxability matrix into race setup and checkout
▷ Connecting to sales tax automation platform for on demand tax rates at checkout
▷ Building new RSU sales tax reports to allow races to do state sales tax reporting
▷ Preparing to implement collection and remittance in Marketplace states
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6. What kinds of things are
taxable?
▷ Race Registrations, Merchandise (Shirts, Hats, Mugs, etc.),
Memberships, Tickets (Admissions), Processing Fees
▷ Each state has their own rules on taxability of each of these items
▷ Each state has their own rules about exemptions for non-profits
▷ Some states have complex exemptions for race registrations or
for the amount of time or number of events for which a non-profit
can be exempt
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7. Isn’t my non-profit exempt from
sales tax?
▷ Non-Profits are exempt from federal and state income taxes
▷ Non-Profits are exempt from Paying sales tax in some states (where the
non-profit is the Buyer)
▷ Non-Profits are not the Buyer of race registrations, they are the Seller when
they host a race
▷ Being exempt from Paying sales tax on purchases does not make you
exempt from collecting sales tax on sales
▷ A limited number of states do exempt non-profits as the Seller. RunSignup
has commissioned research to understand these exemptions and will make
them available where they exist
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8. 8
RunSignup
Taxability
Matrix
State
Tax on Race
Charge
(Admission)?
Tax on
Merchandise?
Tax on
Memberships?
Non-Profit Sales
of Taxable Items
(Merchandise &
Memberships
Only)?
Tax on Race
Charge & Tickets
(Admissions)
(Non-Profits)
RunSignup to Collect and
Remit to State
on Your Behalf (Marketplace
State)?
Tax on Processing
Fees
AK - Alaska No No No NA No No No
AL - Alabama Yes Yes No Taxable Yes Yes No
AR - Arkansas Yes Yes Yes Taxable+ Yes+ Yes No
AZ - Arizona Yes Yes Yes Exempt No Yes Yes
CA - California No Yes No Taxable No Yes No
CO - Colorado No Yes No Taxable+ No Yes No
CT - Connecticut No Yes Yes Taxable* No Yes Yes
DC - District of
Columbia Yes Yes No Taxable No Yes No
DE - Delaware No No No NA NA No No
FL - Florida Yes Yes No Taxable No No No
GA - Georgia No# Yes Yes Taxable+ Yes+ No No
HI - Hawaii Yes Yes Yes Exempt No Yes (beginning 1/1/2020) Yes
IA - Iowa Yes Yes Yes Exempt No Yes No
ID - Idaho Yes Yes No Taxable No Yes No
IL - Illinois No Yes No Exempt No Yes (beginning 1/1/2020) No
IN - Indiana No Yes No Taxable* No Yes No
KS - Kansas Yes Yes No Taxable Yes+ No No
KY - Kentucky Yes Yes Yes Exempt No Yes No
LA - Louisiana Yes Yes Yes Taxable+ No No No
MA - Massachusetts No Yes No Taxable* No Yes No
MD - Maryland Yes Yes No Taxable+ Yes+ Yes No
ME - Maine No Yes No Taxable+ No Yes No
MI - Michigan No Yes No Taxable No No No
MN - Minnesota No* Yes No Taxable* No Yes No
MO - Missouri Yes Yes No Exempt No No No
MS - Mississippi Yes Yes No Taxable No No No

9. 9
RunSignup
Taxability
Matrix
State
Tax on Race
Charge
(Admission)?
Tax on
Merchandise?
Tax on
Memberships?
Non-Profit Sales
of Taxable Items
(Merchandise &
Memberships
Only)?
Tax on Race
Charge & Tickets
(Admissions)
(Non-Profits)
RunSignup to Collect and
Remit to State
on Your Behalf (Marketplace
State)?
Tax on Processing
Fees
MS - Mississippi Yes Yes No Taxable No No No
MT - Montana No No No NA No No No
NC - North Carolina No Yes No Taxable No No No
ND - North Dakota Yes Yes Yes Exempt No Yes No
NE - Nebraska No Yes No Exempt No Yes No
NH - New Hampshire No No No NA No No No
NJ - New Jersey No Yes No Exempt No Yes No
NM - New Mexico Yes Yes Yes Exempt No Yes Yes
NV - Nevada No Yes No Exempt No Yes No
NY - New York No Yes Yes Taxable+ No Yes No
OH - Ohio No Yes No Taxable* No Yes Yes
OK - Oklahoma Yes Yes Yes Taxable+ Yes+ Yes No
OR - Oregon No No No NA No No No
PA - Pennsylvania No Yes No Taxable No Yes No
RI - Rhode Island No Yes No Taxable+ Yes+ Yes No
SC - South Carolina Yes Yes No Exempt No Yes Yes
SD - South Dakota No Yes No Taxable No Yes Yes
TN - Tennessee Yes Yes No Taxable No No No
TX - Texas No Yes Yes Taxable No Yes Yes
UT - Utah Yes Yes No Exempt No Yes Yes
VA - Virginia No Yes No Taxable No Yes No
VT - Vermont Yes Yes No Taxable+ No+ Yes No
WA - Washington No Yes No Taxable No Yes No
WI - Wisconsin Yes Yes Yes Taxable+ No Yes No
WV - West Virginia Yes Yes No Taxable* No+ Yes Yes
WY - Wyoming Yes Yes Yes Taxable+ Yes+ Yes No

10. 10
Exceptions to the Charts
❖ These will be the rules RunSignup follows in Marketplace
states
○ There can not be exceptions
❖ Races will have an option to turn on sales tax collection in
non-marketplace states
○ Uses standard taxability rules identified by RunSignup
❖ Let us know if you see something off in our taxability
matrix. Include specific state statutes and/or rulings
(email: kevin@runsignup.com)

11. 11
How it Works

12. Who Collects and Remits Sales Tax
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13. Summary Reports
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14. Under the Covers Architecture
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15. Race Setup
❖ For Marketplace States
○ RunSignup will Turn it on
○ RunSignup Collects, Reports and Pays
❖ Non-Marketplace States
○ Race turns it on
○ RunSignup Pays Race
○ Race Reports and Pays State Sales Tax
❖ Set Taxability Address
❖ Map Add-Ons and Giveaways to correct tax
code
❖ Set Exemption Status if applicable
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16. Exemption
❖ Races will have to complete Exemption Form
❖ Exemptions are variable based on state
❖ We will require explicit acknowledgement and liability for
Exempt status for each entity and race
❖ Note - if you are helping a nonprofit by collecting the
money into your account, you will not be exempt from
sales tax.
○ Same for timers helping races.
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17. Release Timeline
❖ Private Beta - Oct. 30
○ All races will be able to do limited setup, but limited ability to
enable
❖ Limited Beta - Nov. 4
○ Ability for races to set Exemption status
❖ Release 1- Nov. 12-20
○ RunSignup rolls out collecting in all Marketplace States
○ All races can use the system to collect in non-Marketplace States
○ All nonprofits will be set to Exempt pending confirmation
❖ Final Release - Dec. 15
○ All Exempt Entities will need to complete their own information
○ All RunSignup types of transactions will be covered - Tickets,
Memberships, etc.
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18. Questions?
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19. RunSignup does not provide tax, legal or accounting advice. This
material has been prepared for informational purposes only, and
is not intended to provide, and should not be relied on for, tax,
legal or accounting advice. RunSignup makes no representations,
warranties, or assurances as to the accuracy, currency or
completeness of the information provided in this presentation.
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