4 min read

How the Sales Tax Picture is Changing During the Pandemic - and Beyond

By Robert Dumas on Tue, Jul 21, 2020 @ 11:00 AM

This article was written for the Atlanta Business Chronicle Leadership Trust. To see the original post, click here

The coronavirus has upended just about every aspect of life and business. We are all adjusting to a new way to work, live, shop and more, and it is hard for us to imagine when life will go back to normal, or how many of these changes will stay with us into the future.

Tax collection is one of the many things that has changed a lot recently, starting with postponements to file and pay income taxes at the federal level and in most states.

For sales and use taxes, some states implemented various forms of relief. This included extensions to file returns, tax payment deferral, and waivers of penalties and interest in some situations. But now that most of these extensions and waivers have expired, what does this mean for your business? 

Time not on your side?

For many, the delays came as a relief, but if you didn't pay your sales and use taxes because of an extension, it's possible you set yourself up for trouble down the road. When you collect sales tax from a customer, you become a fiduciary of the state. So, while deferring sales tax payment might mean you had more funds available to run your business, keep in mind that the money collected is now due. 

State slowdowns

It is, of course, hard to predict how the current crisis will impact other aspects of sales tax compliance, such as state tax administration. Assuming some portion of a government’s employees are working from home, their response rates and ability to conduct business as usual will be impacted, resulting in delays in certain areas. Audit programs around the country have slowed or even been suspended.

The outbreak has perhaps created opportunities to work with states and gain a little leeway. If a state has you under audit, for instance, it may be willing to waive interest or penalties. States also might be willing to work with sellers of goods essential in the outbreak, such as protective medical gear, food or cleaning supplies.

Generally, sales and use tax collections mirror the general economy. I expect that collections will likely decline in the short term (perhaps over the next six months or so) and then return to pre-COVID levels in the long term. 

What changes can we expect to see?

Studies indicate that once buyers are comfortable with the online shopping experience, they’re more likely to continue shopping online. (We tend to see this after holiday shopping seasons.) Our current crisis is forcing a lot of people who historically haven’t purchased online to switch to online shopping. Expect many of these people to continue purchasing online.

After the pandemic, I believe we’re likely to have a bigger audience of consumers who will be purchasing goods and services online in a number of tax jurisdictions.

What can be done to streamline the tax collection burden on online businesses in this environment? This has been the question since the 1992 Quill decision. Later, we started to see efforts related to the Streamlined Sales Tax Project (SSTP), which has been implemented with varying success in roughly half the states.

There may be no way to simplify sales tax collection enough unless the states uniformly raise the economic nexus threshold to where the businesses affected innately have the financial wherewithal to adhere to the sales tax rules.

Online retailers and businesses should work with their local lawmakers to voice concern regarding the burden placed on small businesses, both now and in the future.

As the sales tax collection landscape shifts, there comes a significant increase in states requiring remote sellers to collect and remit sales tax based on economic nexus. That means companies may hit economic nexus thresholds in different states, bringing about new regulations and deadlines. It’s another thing for company leaders to track in these already difficult times.

At TaxConnex, our goal is to take sales tax off your plate. Now it is even more important to have a resource to help you understand your sales tax obligations. We aim to help not only our clients through this time, but you as well, even if it is only to serve as a resource to stay up to date with all the changes. Contact us to learn more about how TaxConnex can remove the burden of sales tax from your business.

Topics: sales tax compliance sales tax filing
3 min read

Reminder: Deferred Deadlines Looming for Sales Tax Filing

By TaxConnex on Tue, Jul 14, 2020 @ 11:00 AM

Weeks ago, state tax authorities lent a hand to companies ravaged by the pandemic and postponed sales-tax filing and payment deadlines. But that extra time is about to run out.

Topics: sales tax compliance sales tax news sales tax filing
11 min read

You Can't Solve Sales Tax Problems with Technology Only

By TaxConnex on Tue, Jun 23, 2020 @ 11:00 AM

Since the Wayfair decision two years ago (the 2 year anniversary was just this past weekend)sales tax compliance has become a major priority for many businesses. These businesses all have varying levels of knowledge on the sales tax rules and regulations, but they all have one thing in common: they want a solution to the problem, and they want it to be simple.   

Topics: sales tax compliance sales tax calculation sales tax filing
5 min read

Establishing a Sales Tax Compliance Filing Process

By TaxConnex on Thu, Jun 18, 2020 @ 11:00 AM

You’ve established you have nexus in multiple states, and understand the taxability of your products and services, now what?  

Topics: sales tax compliance sales tax filing
5 min read

Should You Cancel Your Sales Tax Registration?

By TaxConnex on Thu, Jun 04, 2020 @ 11:00 AM

Some time ago you did your homework regarding sales tax. You discovered which of the economic nexus thresholds that you meet, calculated your sales in those states and when required have collected and remitted the sales tax. To do this, you obtained a sales tax license in each jurisdiction where you established nexus.

Topics: sales tax compliance sales tax sales tax filing
5 min read

7 Indicators It's Time to Switch Sales Tax Compliance Providers

By TaxConnex on Tue, Jun 02, 2020 @ 11:00 AM

In this current climate, your focus is understandably on your personal health and the health of your business. The last thing you want to monitor is how states are adjusting their sales tax filing dates and deferments. Even as states and economies begin opening up, there's no telling when we'll be back to normal, or what the new normal will be.

Topics: sales tax compliance sales tax filing
2 min read

Alaska Jurisdictions Combine to Establish States' First Nexus

By TaxConnex on Tue, Apr 21, 2020 @ 11:00 AM

Sales into the state of Alaska have always been exempt from state level sales tax; however, many of the local jurisdictions in Alaska have enforced sales tax collection at the local level provided a business has a physical presence.  Now, with Wayfair, even remote sellers need to worry about collecting the local sales tax in Alaska.

Topics: sales tax sales tax news sales tax filing
3 min read

Your COVID-19 Questions: Answered

By TaxConnex on Thu, Apr 16, 2020 @ 11:00 AM

The constantly changing nature of COVID-19 has left people with a lot of uncertainty. Sales tax isn’t an exception to that uncertainty as over 20 states have announced changes to their sales tax deadlines or policies in order to help businesses as they navigate life during the pandemic. If you’re like many businesses, you have sales tax nexus in multiple states. Keeping up with all their different regulations was difficult enough before COVID-19, and now it’s more complicated than ever.

Topics: sales tax Now it's all on us sales tax filing
3 min read

Responding to a Sales Tax Audit

By Robert Dumas on Thu, Feb 27, 2020 @ 11:00 AM

It happened.  You received a sales tax audit notice from a jurisdiction.  What do you do?

Topics: sales tax compliance sales tax sales tax audits sales tax filing
3 min read

The Role of Technology in Your Sales Tax Compliance Process

By TaxConnex on Tue, Feb 25, 2020 @ 11:25 AM

Technology has radically changed the way consumers buy goods and services.  And while we can easily identify how digital disrupters, like Amazon, Netflix and Facebook have changed our purchasing behavior, a lessor known change is the way they’ve impacted sales tax.  In fact, it’s spurred the largest development in sales tax in over 50 years with the Wayfair case. While the physical presence tests still apply, the Wayfair case dramatically expands the number of businesses subject to sales and use tax obligations.

Topics: sales tax compliance sales tax calculation sales tax filing
2 min read

WEIGHING YOUR OPTIONS – HOW TO MANAGE SALES TAX COMPLIANCE

By TaxConnex on Thu, Feb 06, 2020 @ 12:08 PM

In light of recent legislation changes, you’ve determined you meet sales tax nexus thresholds outside of just your home state and now you have to collect, file, and remit sales tax in multiple states. What a headache. To make matters worse, this is a compliance issue, so you must act.

Topics: sales tax compliance sales tax filing
2 min read

5 Key Pieces of Your Sales Tax Compliance Filing Process

By TaxConnex on Tue, Jan 14, 2020 @ 11:15 AM

Once you’ve determined your requirement to collect and remit sales tax, you’ve set-up a process to charge sales tax, and you have registered with each required state, you need to consider how you will manage the return filing process.  Some key areas to consider are the following:

Topics: sales tax compliance sales tax filing
1 min read

Pennsylvania's Remote Seller Nexus Laws

By Brian Greer on Fri, Apr 12, 2019 @ 08:32 AM

This year the Commonwealth of Pennsylvania is joining a number of other states in the U.S. that have already defined economic nexus for its sales tax as it applies to online sellers.  

Topics: sales tax news sales tax filing
1 min read

An Update on Sales Tax Holidays

By Brian Greer on Thu, Jul 27, 2017 @ 01:54 PM

Consumers in some US states are gearing up for an annual shopping holiday free from sales tax.

Topics: sales tax filing
1 min read

Sales Tax News from Around the Country

By Brian Greer on Mon, Jul 24, 2017 @ 02:01 PM

As a business owner, you are already familiar with the seemingly ever-changing tax laws.  Federal, state, and local tax changes are difficult to follow.  If you engage in interstate commerce, keeping up with the changes in each location is nearly impossible.  To help update you, here is a short list of sales tax news from around the country.

Topics: sales tax news sales tax filing
4 min read

2017 State Sales Tax Holidays

By Noelle Ard on Thu, Mar 02, 2017 @ 02:00 PM

It’s hard to believe that Spring has sprung…at least down in the South it has.  With the coming of spring and daylight savings time on the horizon, many people find themselves starting that to do list and preparing budgets for home improvements, summer vacations, back to school, and more.

Topics: sales tax filing