Many states use sales tax holidays to waive or reduce sales tax on various items. These holidays can be annual or even two or more times a year. Online purchases usually receive the same tax treatment during these holidays as in-person purchases; remote sellers aren’t permitted to charge tax on qualifying goods during sales tax holidays, but how do you know where this is happening and when or when not to charge sales tax?
2 min read
Missouri Enacts Economic Nexus
Missouri has officially become the last state with a state-wide sales tax to enact economic nexus.
The Show Me State follows on the heels of Florida, where economic nexus kicked in as of July 1 for remote sellers and marketplace facilitators.
Topics: sales tax compliance sales tax
3 min read
Your Personal Responsibility in Sales and Use Tax Non-Compliance
Sales tax is a significant revenue source for many states. In fact, according to the Tax Policy Center, for many states, it can comprise 25%-35% of a state’s revenue.
Topics: sales tax compliance sales tax
5 min read
Monthly Review of What's New in Sales & Use Tax
There’s always something changing in the world of tax, especially sales tax. And 2021 continues to prove that. Here’s a review of some of the recent changes and updates.
Topics: sales tax sales tax news
3 min read
State Discounts for Sales Tax
Collecting and remitting sales tax can be onerous – and expensive – for any business. That’s one reason some states give a collection discount to help with the costs of managing sales tax.
Topics: sales tax compliance sales tax
5 min read
Taking a Look at Sales Tax Exemptions and Why They're Important
Taking advantage of sales and use tax exemptions can save your business money and headaches. But exemptions can be harder to secure in some states than in others.
Topics: sales tax compliance sales tax sales tax filing
5 min read
7 Ways a Business is Selected for Audit
As we entered 2021, many industry experts believed that state sales tax audits were likely to increase sharply due to the loss of state revenue during the pandemic. Likewise, in a recent TaxConnex survey we saw that two out of five respondents agree with the experts, saying that they expect sales tax audits to become more common over the next two years. 38% of respondents said they believe audit levels will stay the same, and in a separate question, 66% have already seen an increase in the number of audits in the past two years.
Topics: sales tax sales tax news
3 min read
Taxability and Your Products and/or Services - Easy Answer Right? It Depends.
‘It depends’ is a commonly used phrase when it comes to sales tax, and a quite frustrating one at that. We know that. But when it comes to taxability, it’s often our answer.
Topics: sales tax sales tax news
6 min read
4 Key Pieces of Your Sales Tax Compliance Process
Both the process of reporting sales tax and the level of sales tax detail required varies from state to state. Understanding the nuances of each state will help you avoid any missteps resulting in jurisdictional-imposed penalties.
Topics: sales tax compliance sales tax
4 min read
What's New in State Sales and Use Taxes
There’s always something changing in the world of tax, especially sales tax. And 2021 continues that trend. Here’s a review of some of the recent changes and updates.
Topics: sales tax sales tax news
5 min read
Unexpected Growth Can Mean Sales Tax Obligations
This article was written for the Atlanta Business Chronicle Leadership Trust. To see the original post, click here.
Every business owner wants their company to grow. And when that growth is unexpected, it feels that much sweeter. But don’t forget that success that comes from selling into more states can also expand your sales tax burdens.
Businesses that sell into multiple states or jurisdictions have to pay attention to sales tax thresholds, and it’s not a one-time project. Almost all states and more than a few localities have enacted some form of economic presence as a way to enforce sales tax obligations ever since the 2018 Supreme Court Wayfair decision. Businesses must also be aware of triggering the obligation to collect and remit sales tax due to a physical presence. A physical presence is often seen as your physical office location but can be determined by where your inventory is stored, where employees work or where third-party contractors are utilized, among other criteria.
Having either a physical presence or an economic presence can lead to sales tax nexus, or the connection a business has with a state or taxing jurisdiction. Nexus can happen quickly (or over time) and for a variety of reasons.
Ways of creating a sales tax obligation
In the United States, a business’s obligation to collect and remit sales tax starts with nexus. Sales tax nexus can be categorized into economic or physical.
Economic nexus requires remote sellers that may not have previously had a physical presence to collect sales tax because they’ve reached state and jurisdiction revenue thresholds or reached certain transaction thresholds. In South Dakota, for instance, the revenue threshold is $100,000 in sales or 200 transactions in the previous or current calendar year. Many states mirror these same thresholds, while other states set their own parameters. Florida and Missouri have not implemented any economic nexus standards — but stay tuned as each state is considering options.
Physical nexus means a business has a direct connection to a state. Most often this happens when a business operates out of a brick-and-mortar location in a tax jurisdiction. Other activities that can create a physical presence/nexus include employees or offices in a state, sales reps or agents visiting a state, delivery vehicles or maintenance or repair services in a state, attending trade shows in a new state, or inventory stored in a state.
Topics: sales tax nexus sales tax
5 min read
Zero-Due Returns: What They Are and When You Have to File Them
Suppose you’re registered for sales tax in a jurisdiction because you have established sales tax nexus. For various reason though, you don’t have any sales tax to remit. You may think that because you haven’t collected any sales tax, you have no return to file.
Topics: sales tax sales tax filing
4 min read
Selling Into the U.S. - Understanding How Customer Location Impacts Which Sales Tax Rates and Rules You Apply
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, local area tax jurisdictions also have power over some aspects of taxation and can set different rules for their area.
Topics: sales tax compliance sales tax
2 min read
Holdout States Moving Toward Sales Tax Requirements
Of the 50 states, 45 (plus DC) charge a state-wide sales tax. Two of those states that have a state-wide sales tax, Missouri and Florida, have yet to adopt economic nexus standards set by the 2018 South Dakota v. Wayfair case. At least for now.
Topics: sales tax sales tax news
4 min read
Sales and Use Tax Updates from March
There’s always something changing in the world of tax, especially sales tax. And 2021 continues to prove that. Here’s a review of some of the recent changes and updates.
