Sales of tangible personal property (TPP) are presumed to be taxable unless specifically identified as not taxable. However, certain exemptions could apply making the sale of TPP exempt from sales tax in some situations. An exemption could be related to the type of business that is buying the TPP – a non-profit or government entity in certain states for example. But the most common type of exemption is a resale exemption and is applicable to wholesale transactions.

Taxable sales of products direct to end users has been a staple of business for ages. One relatively new development is the complex overlay of sales tax on these transactions.

Given the complexity that already exists regarding sales tax, it’d be great if states were the only jurisdictions that levied them.

“Sourcing” or as we often call it, situsing, is key when you determine sales tax obligations: It refers to the location where a sale is taxed. According to the Sales Tax Institute there may be changes on the horizon– and though the aim appears to lean towards improving life for remote sellers, the changes only seem to make meeting sales tax obligations harder.

Once you’ve determined your requirement to collect and remit sales tax, you’ve set-up a process to charge sales tax, and you have registered with each required state, you need to consider how you will manage the return filing process.

There’s always something changing in the world of tax, especially sales tax. Here’s a review of some of the recent changes and updates.

You’re trying to run a business and sales tax is not at the forefront of your plans. Nevertheless, you can do a quick check for the most common errors. Make sure you aren’t making these common mistakes to ensure you have sales tax in order and aren’t at risk for penalties and fees in the case of an audit.

From time to time, sales tax outsourcing relationships fail to work properly, and a change is necessary.

As the sales tax outsourcing relationship progresses over time, sales and marketing messages give way to the realities of the operational relationship.  Changes in ownership, staff or operations can affect provider performance or client needs.  Let’s take a look at some of the major beefs that respondents had with their sales tax providers based on a survey TaxConnex conducted of financial professionals at the end of 2021. 

In years past, auditors could show up at your door asking to look at your records. Now that’s much less common. Usually, you learn about an audit through a notice or letter from the state or jurisdiction in question with instructions on how the audit will proceed.  Many audits are conducted remotely, and an auditor never visits your office. Audits remain an important tool for tax jurisdictions to evaluate the level, or lack thereof, of sales tax compliance within a business. Even though many audits have shifted to remote audit, the fundamentals of the sales tax audit haven’t changed. 

Not paying attention to your sales tax obligations is never wise. 

True, it’s a relatively new requirement to collect sales and use tax from remote customers, but it’s one the taxman has always taken seriously from businesses – and that seriousness is only intensifying. 

It’s also mostly up to you to determine your sales tax obligation, and the rules for complying change frequently. A recent TaxConnex survey found that four out of five respondents were not confident about how their company handled its sales tax obligations.

Sales tax has a universe of changing conditions. Now we can add more: cryptocurrency (such as bitcoin) and what seems to be its cousin, non-fungible tokens (NFTs).

Sales tax is more complicated than ever, especially in a post-Wayfair world. And what’s worse is that everyone who says they’re simplifying sales tax is still leaving the hardest parts – and the liability – up to you.  This is especially true when it comes to state registrations. For some reason, many of the software and service providers who claim to manage sales tax for you, don’t help with registrations, and if they do it comes at extra cost.

There’s always something changing in the world of tax, especially sales tax. Here’s a review of some of the recent changes and updates. 

Federal Income Tax Day, April 18th, looms large in everybody’s mind right now. Too bad sales tax doesn’t come with a deadline that simple. 

Tangible personal property has historically been subject to the collection and remittance of sales tax while many services have been non-taxable (or exempt). More and more services are becoming taxable and represent a potential big wave of tax changes and updates in the years ahead.

Sometimes if we hear a phrase often enough, we don’t appreciate the importance of all the words. One such phrase is “sales and use tax.”