Subscription-based selling is appealing to businesses for its reliability of loyal customers and steady revenue.  From gift boxes to magazines to cutting-edge software, it’s one of the most diverse ways of selling.

The model does come with steady sales tax obligations and risks though, and if not properly understood, it could lead to significant sales tax risk in the business.

Online sellers hear an endless amount these days about “marketplace facilitators.” What are they? How can they help you? And how can they hurt?

We are in the midst of the busiest shopping season of the year. A time many retail businesses rely on to meet their year-end numbers. But what happens when a world still rocked by the pandemic continues to make the majority of its sales online?

As if sales tax nexus and taxability rules weren’t confusing enough, throw in marketplace facilitators and drop shipments and it’s easy for a business of any size to want to give up on sales tax compliance.

Drop shipments are more prevalent in today’s marketplace than most realize –many purchases made online today are commonly drop-shipped to consumers, transactions that typically involve multiple states and parties. Navigating the application of sales and use taxes and related exemptions in a drop shipment scenario is tricky for both the retailer and the drop-shipper. 

Online retailers definitely have something to be smiling about this season. Cyber Monday saw Americans drop $9.4 billion. That figure is up 20% from last year’s $7.9 billion in online sales and it beat this year’s Black Friday’s sales.

According to the United States Department of Commerce's Census Bureau news, e-commerce transactions made up 9.1% of total retail sales in the third quarter of 2017, accounting for  more than $115 billion in sales.

If your company engages in e-commerce, you have exposure to state sales tax nexus laws in any location where you do business.  Nexus rules change frequently.  Here is the latest news to keep you informed.