When you sell across multiple states – or even within various localities in a single state – one striking observation emerges: the consistent inconsistency of sales tax rates.

Ecommerce couldn’t exist without shipping (and probably not without shipping’s partner “handling,” either), but do either incur sales tax?

Have Home Rule Jurisdictions Made the Burden of Managing Sales and Use Tax Too Much?

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.

At first glance, the sales and use tax requirements for a contractor seem quite simple. Contractors are typically considered the end-user/consumer of all tangible personal property purchased and used by them in conjunction with the performance of a contract to improve real property. As such, all purchases by a contractor are usually subject to sales and use tax. Since contractors are considered service providers, charges by them for real property improvement services are typically exempt from sales and use tax. Sounds simple... but like most things in sales tax, it isn’t as simple as it seems.

General tax laws are strange. Maybe sales tax laws make more sense? You can be the judge of that.

Many industries come with confusing sales tax complexities. So does agriculture, and several aspects make this industry trickier than others for sales tax.

Here are points to keep in mind regarding sales tax and agriculture.

Certain excerpts pulled from The CommLaw’s Client Advisory found here: https://commlawgroup.com/2024/fifth-circuit-court-of-appeals-declares-fccs-universal-service-fee-unconstitutional/

If it seems like jurisdictions just ceaselessly add additional sales tax laws, statutes and restrictions, recent news out of three states should be refreshing.

Sales tax isn’t simple. Here’s a step-by-step overview of various complications of sales tax compliance – and how to handle them.

Notices are a way for taxing jurisdictions to get in touch with you. Monitoring and responding to notices as well as making the corresponding adjustments or taking the prescribed actions is one of the many pieces of your sales tax compliance process. A very important piece in fact, as ignoring a notice can put you and your business in hot water, opening the door to additional penalties and fees. So who is managing your sales tax notices?

Sales tax audit changes have occurred over the last several years, post-Wayfair. Prior to Wayfair, a significant component of sales tax audits was focused on use tax. Specifically, tax due on purchases that were not charged since the vendor did not have nexus in the state of the sale.

Maintaining sales tax compliance documentation is crucial for businesses to ensure smooth and successful audits. Proper documentation allows auditors to interpret and verify your financial transactions accurately. Unfortunately, many businesses find themselves unprepared when faced with an audit, lacking the necessary documentation. This can lead to auditors assuming transactions are taxable, or making historical projections or arbitrary assessments of taxable sales. 

Knowing when and where you have sales tax obligations is a key part of compliance. And understanding your taxability – especially if you don’t sell just tangible personal property (TPP) – is key to getting the right sales tax rates on transactions.

You may think your business is in full compliance with your sales tax obligations nationwide – and you may well be – but America’s 13,000-plus sales tax jurisdictions love to send notices. And without the right correspondence or adjustments due to these notices, you could be in hot water.

Sales tax compliance has many moving parts, not just in the filing but in everything that goes into making sure you stay on the legal side of the jurisdictions where you have sales tax nexus.