Ever had a bad connection on a video conferencing platform? It can be a confusing and frustrating experience.

That’s a lot like understanding the taxes on videoconferencing services right now. With the recent boom of video conferencing brought on by the necessity of a way to meet during the pandemic, businesses and governments alike are trying to figure out how to best apply sales tax to these services, or if they are even taxable.

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. 

Sales tax is complex for any business selling into multiple states. But there are specific states and jurisdictions that make it extra confusing for those trying to maintain compliance. One such location is Chicago, Illinois.

An exemption certificate is used to exempt an otherwise taxable transaction from sales tax. The most common exemption certificate is a resale exemption certificate (aka a resale certificate). In the absence of a valid resale certificate, an auditor is likely to assume the transaction was taxable. As a result, it’s critical for the seller to maintain copies of these resale certificates in the event of an audit. 

For most businesses, sales tax is not a top priority. It probably doesn’t even make the top 5 list! But if not managed correctly, it can cause major headaches. Understanding the various aspects of your sales tax process is critical to minimize your risk and to keep your business on solid ground as it relates to sales tax.

There’s no way to sugarcoat it: Sales tax obligations are already difficult at the state level, but when you bring it down to local jurisdictions, or home rule jurisdictions, you get the next level of complexity.

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 that occurred over the last month. 

We are very excited to announce the launch of our newly designed website. Visit us at www.taxconnex.com to check it out! 

Many states use sales tax holidays to waive or reduce sales tax on various items. These holidays can be annual or even two or more times a year. Online purchases usually receive the same tax treatment during these holidays as in-person purchases; remote sellers aren’t permitted to charge tax on qualifying goods during sales tax holidays, but how do you know where this is happening and when or when not to charge sales tax?

Missouri has officially become the last state with a state-wide sales tax to enact economic nexus. 

 The Show Me State follows on the heels of Florida, where economic nexus kicked in as of July 1 for remote sellers and marketplace facilitators. 

Sales tax is a significant revenue source for many states. In fact, according to the Tax Policy Center, for many states, it can comprise 25%-35% of a state’s revenue.

A voluntary disclosure agreement (VDA) is a legal means for taxpayers to self-report back taxes owed for income, sales, property, and other tax types. In exchange for voluntarily reporting the tax due, states offer a waiver of some penalties and other benefits to the business. If back taxes are not disclosed but are instead discovered through an audit, the taxpayer is at a disadvantage and will end up being assessed various penalties plus interest plus all historical tax due.

A bill to enact economic nexus requirements – creating a sales and use tax obligation on remote sellers and marketplace facilitators – awaits only a signature to become law in Missouri.

June 21 marked three years since the landmark decision in the South Dakota v. Wayfair case. The years since June 2018 have been unlike anything in the history of sales tax.

Legalization of cannabis and how it would be taxed has been a discussion for many years. But as states continue to pass laws legalizing the sale of cannabis, the businesses trying to capitalize on the market are struggling with the complexities of taxation as it differs from other sales.  

They said it would be simple.  They said they could automate it all, but in fact, you’re still doing a lot of the work.  Why are you paying more penalties for missed notices and late payments than you were before you started working with your sales tax vendor?  Guess what – we frequently hear these situations from businesses ready to make a switch. The good news is there are other providers that put the client first and ensure sales tax is managed correctly. You just have to know what to ask when investigating your potential provider.