Selling your products/services into the US opens a sizable range of sales opportunities, but it could also open the door to significant complexity in managing your US sales tax obligations.  Once you understand when you have established a US sales tax obligation and know your products and services are taxable, it’s time to set up a filing process to ensure on-going compliance.

The United States has possibly the world’s most complex sales tax regime. This is due to each state setting its own sales tax rules, and states often take widely varying approaches. As a result, each state has a different tax framework, with varying rules around everything from tax liability and tax rates to exemption categories and reporting requirements. On top of this, some local area tax jurisdictions also have powers over some aspects of taxation and can set different rules for their city or county.

Economic nexus thresholds in many states depend on two numbers. Now, almost six years after the landmark Wayfair case ignited sales tax obligations for more remote sellers, one of those numbers might be falling out of favor.

Every now and then something comes along that transforms sales tax. The 2018 Wayfair decision was such a milestone. Another was the advent of the likes of marketplace facilitators such as Amazon, Etsy and eBay, among others.

What’s the latest brewing today in sales tax? A lot, spanning many hot topics – and if you can believe it, not all the news is bad.

Adding a new product is great, new revenue streams are wonderful. Just don’t let sales tax turn the situation into a nightmare.

We hear a lot about nexus and various thresholds but not as much as about tax situs.

In part 1, we looked at the mounting financial costs of maintaining sales tax compliance with the thousands of tax jurisdictions nationwide. Now let’s look at how some companies have tried to game the system – and what to do so you don’t have to run that risk.

What a major issue for your remote business these days... Constantly changing regulations. Tens of thousands of tax jurisdictions coast to coast, from the biggest states to the tiniest municipalities and everywhere in between. All wanting you to calculate, collect and remit the precise amount of sales tax if you have nexus there.

Can all those tax authorities really all keep up with your obligations? Should take a chance that a jurisdiction will never catch you? What happens if they do?

It’s been five years since the U.S. Supreme Court’s Wayfair decision gave tax jurisdictions the power to require out-of-state companies collect and remit sales tax. Those governments jumped on the chance of such revenue and continue to do so.

If you’re a company outside of the United States and you look to start selling into America, congratulations – the U.S. offers you a huge new market. It also offers complex sales tax obligations you may not know about.

Last time, we looked at trailing nexus and a few reasons you might want to cancel your sales tax registration with a state.

You know all about reaching sales tax nexus: selling enough or having a physical presence in a tax jurisdiction sufficient to create a connection with that jurisdiction and create an obligation for you to collect and remit sales tax.

A state has not added a statewide sales tax since Richard Nixon was in the White House. Vermont was the last to do so in 1969. There are five remaining states with no state level sales tax: New Hampshire, Oregon, Montana, Alaska and Delaware – often referred to as the NOMAD states.

When your customers shop with you online, they provide a physical billing or shipping address. Whether they know it or not, they also give you another bit of location information: an Internet Protocol (IP) address.

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, each state has a different tax framework, with varying rules around everything from tax liability and tax rates to exemption categories and reporting requirements. On top of this, some local area tax jurisdictions also have powers over some aspects of taxation and can set different rules for their area.