Weeks ago, state tax authorities lent a hand to companies ravaged by the pandemic and postponed sales-tax filing and payment deadlines. But that extra time is about to run out.

At TaxConnex, we work with a lot of telecommunications service providers that are new to the business.  Many are existing MSPs (Managed Service Providers) or IT management companies that would like to expand their service offering and become “stickier” with their clients.

If you don’t live in the United States (or even if you do), the laws surrounding US Sales Tax can be quite confusing. In fact, the United States has possibly the world’s most complex sales tax regime. This is because each state sets its own sales tax rules, and states often take widely varying approaches. As a result, every state has a different tax framework, with variations in regulation covering everything from tax liability and tax rates to exemption categories and reporting requirements. On top of this, local area tax jurisdictions also have powers over some aspects of taxation and can set different rules for their area. 

Time for a refresher on drop shipments - Check out our blog from earlier this year on navigating drop shipments, or watch our quick video where Jeff & Brian break it down. 

Technology companies have historically considered themselves fairly insulated from multi-state 

Since the Wayfair decision two years ago (the 2 year anniversary was just this past weekend), sales tax compliance has become a major priority for many businesses. These businesses all have varying levels of knowledge on the sales tax rules and regulations, but they all have one thing in common: they want a solution to the problem, and they want it to be simple.   

You’ve established you have nexus in multiple states, and understand the taxability of your products and services, now what?  

The pandemic has prompted shelter in place orders across the country, meaning many employees have been working from home to contain COVID-19. Some of your workers may have also chosen to work in second homes or with different family for a multitude of reasons ranging from comfort to avoiding hot spots of the outbreak.

The US Supreme Court ruling in South Dakota v. Wayfair, Inc. et al gave rapid rise to the new sales and use tax obligations for online sellers. The rule treats a virtual storefront similar to a physical storefront. How did we get there and what should every business be doing to reduce risk?  

Sales and use tax compliance is not only difficult and time-consuming – it’s also expensive if you do it wrong.

Some time ago you did your homework regarding sales tax. You discovered which of the economic nexus thresholds that you meet, calculated your sales in those states and when required have collected and remitted the sales tax. To do this, you obtained a sales tax license in each jurisdiction where you established nexus.

In this current climate, your focus is understandably on your personal health and the health of your business. The last thing you want to monitor is how states are adjusting their sales tax filing dates and deferments. Even as states and economies begin opening up, there's no telling when we'll be back to normal, or what the new normal will be.

Some states have postponed sales-tax filing and payment deadlines well into the weeks ahead, part of a COVID-19 relief effort for battered businesses. States and even localities have differed in how they are handling the deferments. Some deferments relate to filing and payment, some just payment, and some states are granting deferments only when requested.  

If you’re a telecommunications services company, you face greater trials than other businesses when complying with federal, state and local jurisdictions.  In addition to state and local taxes, your business may also be subject to various federal and state regulatory obligations.

In talking with friends and family about what we do at TaxConnex in terms of preparing and filing sales tax returns – especially this time of the year – they often say, “Oh you must be crazy busy right now”.  I sometimes laugh, but often I sigh stating that income tax season is generally a once a year deal (this year pushed out at least an extra three months) and sales tax is EVERY month.