States are still reeling in sales tax deficits brought on by the economic downturn during the pandemic, but the addition of economic nexus has appeared to have somewhat alleviated the deficits. States are starting to see an increase in online sales tax collections as more and more people remain online for work and shopping. 

Sales tax is complicated. Many sales tax companies will tell you it’s simple with their solution, but when you take a look at all that goes in to compliance – you will understand that no technology can fully automate or manage sales tax without a good bit of project management from your side.  

Lost sales, expenses for cleaning, more time and money for employee protection and training are just some of the reasons for businesses to claim they now have to charge extra to pay for responding to the pandemic (aka, “COVID surcharges”). In many places and for many industries these charges have become commonplace.

A review of what’s been happening and updates states have made in sales & use tax so far in 2020.

The District of Columbia attorney general is suing grocery-delivery service Instacart for failing to pay hundreds of thousands of dollars in District sales tax.

Wyoming lawmakers have declined to move forward with two bills to increase and broaden the state’s sales and use taxes, news outlets said.

When it comes to sales tax, most businesses fit into one of three categories:

It’s been quite the year as many businesses and lives have been put on hold. But one thing that hasn’t stopped is the need to collect and remit sales tax. Even in the midst of a pandemic, sales tax updates have continued to happen. In this blog, we will take a look at some of the major sales tax developments that have happened so far in 2020.

A key document of sales & use tax is the exemption certificate.

Sales tax nexus is the basis for all your sales tax decisions. Without nexus, you have no further obligation to a state. If you do have sales tax nexus, then you need to dig a bit deeper and understand if your products and/or services are taxable. If they are, and you have nexus within a state that charges sales tax, in most instances you should register and start collecting sales tax. Simple right? Not so much.

The pandemic has changed the business world. But for how long? And what might happen to sales and use tax obligations when what were supposed to be temporary business-continuation measures harden into just the new way of working and doing business? 

Is a Voluntary Disclosure Agreement right for you? Voluntary Disclosure Agreements (VDAs) can be an effective tool in mitigating prior period sales tax exposure, however it may not always be the best solution.

Is your outsourced sales tax compliance vendor making your life easier? It's a simple question, and if your answer is anything but yes, it may be time for a change. Sales tax compliance comes with a lot of complexity and liability. You shouldn’t be paying someone to do it for you but still managing the brunt of the headaches.

Ever-changing thresholds, intensifying audits, some 12,000 taxing jurisdictions: No online business needs to be told how complex America’s sales tax burden can be.

The complexity of sales tax has grown immensely in the last two years with the introduction of economic nexus due to the South Dakota vs Wayfair case.  You would think after two years things would have gotten easier, but that’s not really the case. Because of this, many businesses still have misconceptions about how Wayfair might affect them – not to mention cost them money and headaches. 

Due to the pandemic, many businesses are in a precarious position relative to long-term survival. Some companies who previously were doing well are now in a situation in which a merger or acquisition could be their only way to survive.  No matter your situation, understanding how sales tax obligations could hinder your sale is important for any business involved or thinking about merging or being acquired.