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We can’t say it enough – sales tax is complex. Whether you outsource aspects of the process or manage it all in house, there are a lot of moving parts and nothing seems to stay the same for long.
We’ve compiled some of the top questions we get from clients on sales & use tax. Part 1 of these questions was on sales tax and business services. Keep reading for some of our more introductory questions we get asked on a daily basis.
When looking at all that goes in to maintaining your business’s compliance in sales tax, the filing of your returns is often seen as one of the easiest tasks. Yet, that doesn’t mean there aren’t things that can trip you up in the process.
As if understanding your nexus obligations wasn’t confusing enough, you throw in words and phrases like marketplace facilitator, TPP, tax situs and economic vs. physical nexus and even the most advanced finance professionals can be thrown for a loop.
Companies that perform services often see themselves as tax exempt, and in many cases that is true, but there are certain states and situations in which that is not the case. Gain a better understanding of your sales and use tax obligations with these frequently asked questions we have received from businesses that provide services.
The short answer: maybe. What’s an IP address and how can it influence your company’s need to collect and remit sales tax to states?
When your customers access your website and make purchases, the customer is often providing a billing and/or shipping address which can be used to determine where sales tax applies. In certain online transactions, these physical addresses may not be available. As a result, an Internet Protocol (IP) address may be all that’s available. The IP address of the computer being used to access your website can be identified and via third party databases, the IP address can be mapped to a physical address for purposes of applying sales tax.
U.S. sales tax post-Wayfair is confusing enough. What if you begin selling into a foreign country? You’ve heard it before that US sales & use tax laws are some of the most confusing, but how are things done with our neighbor to the north? Do the same rules apply, is it easier to understand?
In Alabama, rising pandemic-related online shopping has been a “life saver” for the state’s municipal governments and a “financial vaccine for Alabama’s counties,” the state said. The state’s SSUT has taken in more than $309 million overall during the current fiscal year – almost double the tax generated during all of fiscal 2018-19. The number of online retailers in the program has also grown from fewer than 200 in 2017 to more than 2,900 today.
Under the SSUT formula, 50 percent of all revenues from online sales from companies participating in the program go to the state. The legislation also expanded the program to allow out-of-state online sellers to join the SSUT even if they have an affiliate with a brick-and-mortar presence in Alabama.
The Decatur, Ala., city council was also recently set to vote on giving a quarter of online sales tax revenue to the city’s schools in 2021. (A portion of the funds must support child-related nonprofits.) The city expects to get about $2 million in 2020 and again in 2021 from online sales tax.
It has been two years since the US Supreme Court passed the Wayfair decision which paved the way for states to enact economic nexus rules. At this point, the majority of finance professionals understand the need to maintain sales & use tax compliance. Most businesses have some type of process in place although it may not be comprehensive enough. What do you do when you discover you are out of compliance in some states? Or you acquire a business that has done very little to manage sales and use tax compliance?
In this blog, we’ll outline 5 steps that will put you on the right track to have your business prepped to maintain compliance.
This article was written for the Atlanta Business Chronicle Leadership Trust. To see the original post, click here.
Taxes are an integral part of the telecom world. Taxes, fees and government surcharges on telecommunications services increased from 19.1% to 21.7% in 2019 (even as average monthly bills for consumers actually dropped).
In talking with countless telecommunications service providers about their various tax and regulatory requirements, there are some recurring themes I hear that can be troubling. These recurring issues tend to pop up with new VoIP service providers. Perhaps they’ve been in business for years previously — and they may have even had various sales tax obligations historically — but they are now offering VoIP services that expose them to a completely different set of tax and regulatory obligations.
States are still reeling in sales tax deficits brought on by the economic downturn during the pandemic, but the addition of economic nexus has appeared to have somewhat alleviated the deficits. States are starting to see an increase in online sales tax collections as more and more people remain online for work and shopping.
Sales tax is complicated. Many sales tax companies will tell you it’s simple with their solution, but when you take a look at all that goes in to compliance – you will understand that no technology can fully automate or manage sales tax without a good bit of project management from your side.
Lost sales, expenses for cleaning, more time and money for employee protection and training are just some of the reasons for businesses to claim they now have to charge extra to pay for responding to the pandemic (aka, “COVID surcharges”). In many places and for many industries these charges have become commonplace.
A review of what’s been happening and updates states have made in sales & use tax so far in 2020.
The District of Columbia attorney general is suing grocery-delivery service Instacart for failing to pay hundreds of thousands of dollars in District sales tax.
Wyoming lawmakers have declined to move forward with two bills to increase and broaden the state’s sales and use taxes, news outlets said.
When it comes to sales tax, most businesses fit into one of three categories:
When you think about tax compliance, of any kind, the first thing that comes to mind is filing, or...
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