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Sales tax compliance is complex, there’s no doubting it. While many hoped that the Supreme Court decision in South Dakota vs. Wayfair would make things more clear, it did quite the opposite.

As a result of the Wayfair decision over two years ago, sales tax obligations have impacted more and more businesses across all industries, many who previously had no sales tax responsibility. How does your business ensure it’s taking the right steps to maintain compliance? We’ve put together 7 tips to keep you on the right track.

  1. Understand physical nexus – and that it’s not just about your office location.
  2. Monitor economic nexus thresholds as your business grows.
  3. Know if your products/services are subject to sales tax in those states where you have either physical or economic nexus.
  4. Understand if you need a calculation software and ensure you are charging the correct amount of sales tax.
  5. Know your filing dates for each state/jurisdiction– it varies by location and could change throughout the year, it’s not just a set it and forget it process.
  6. Make sure you collect and manage your exemption certificates – expired, invalid or missing certificates makes you responsible for uncollected sales tax.
  7. Understand the reporting process for each state in which you file (mailed or online, check or electronic payment).

Sales tax non-compliance can add significant risk to your business, and it’s a lot to manage for an internal team. One small mistake can have large implications and risk. Consider outsourcing to alleviate the burden, expenses and risk.

Contact TaxConnex to learn about our full service outsourcing programs.  

Robert Dumas

Written by Robert Dumas

Accountant, consultant and entrepreneur, Robert Dumas began his public accounting career on the tax staff at Arthur Young & Co., followed by a brief stint at Grant Thornton. In 1998, Robert founded Tax Partners, which became the largest sales tax compliance service bureau in the country, and later sold it to Thomson Corporation. Robert founded TaxConnex in 2011 on the principle that the sales tax industry needed more than automation to truly help clients, thus building within TaxConnex a proprietary platform and network of sales tax experts to truly take sales tax off client’s plates.