1 min read

Sales Tax Nexus Abuzz

By Brian Greer on Thu, May 05, 2016 @ 10:00 AM

There are exciting times, or at least interesting times, ahead for the debate surrounding sales tax nexus. 

States, growing weary of the inability to require remote sellers to collect sales tax, continue to take matters into their own hands. 

It’s been nearly 25 years since the US Supreme Court ruled in the Quill case establishing the substantial physical presence standard by which sales tax collection and remittance obligations are determined.  During recent history, states have taken steps that blur the line in terms of what substantial physical presence really is – some states adding provisions to account for click-through nexus for example.  Now, states are going rogue, and blatantly ignoring the Quill standard – and opening the door to legal challenge potentially escalating to another US Supreme Court ruling.

Topics: sales tax nexus sales tax remote sellers
2 min read

Sales Tax - The Elephant In The Room

By Brian Greer on Thu, Mar 17, 2016 @ 10:38 AM

Over the years, I’ve noticed how sales tax is often pushed aside and overlooked as competing priorities squeeze business owners’ and tax departments’ time.

There are numerous situations when I’ve heard, “I don’t have time to talk about sales tax right now because________.”  You fill in the blank. 

Because it’s year-end. 

Because state income tax returns are due. 

Because we’re in the middle of an acquisition.

Topics: sales tax nexus sales tax
1 min read

Sales Tax Nexus and Affiliates

By Brian Greer on Tue, Mar 15, 2016 @ 02:00 PM

Recently, we were engaged to perform a sales tax nexus review.  I always ask if the business has any affiliates in any states we are reviewing. 

Topics: sales tax nexus sales tax Amazon laws affiliate nexus
3 min read

I Owe More Sales Tax? The Reality of Double Taxation

By Jeff Meigs on Tue, Mar 08, 2016 @ 03:03 PM

An oldie but goodie, worth a re-run (originally posted Sept. 13, 2013)...

In recent weeks I’ve talked with at least three companies who sell to end-user/consumers who have told me that they don’t have an  sales and use tax risk because they pay sales tax to their vendors – while they failed to charge sales tax to their customers.  They are comforted by the fact that “the state got their tax revenue and therefore shouldn’t come knocking for more”. 

When I tell them that they still have a sales or use tax liability, they are surprised.  When I tell them they may not get ANY credit for the tax they paid to their vendors, they get irate –

“What do you mean I still owe the tax – that’s double taxation!”

Sales tax is imposed on the sale at retail of tangible personal property.  Therefore, sales tax generally doesn’t apply to wholesale transactions – as long as the appropriate exemption/resale documentation is executed.  When a reseller fails to provide the appropriate exemption documents to its vendor, the vendor is required to charge sales tax to the reseller.  Subsequently, when that reseller sells to the end-user/consumer, there is a sales tax due on that retail sales price. 

Topics: sales tax nexus sales tax sales tax audit
3 min read

Sales Tax, Nexus, and Drop Shipments

By Brian Greer on Tue, Feb 09, 2016 @ 02:00 PM

Drop shipment transactions can be challenging for both a retailer and a supplier. In a typical drop shipment transaction, the retailer is making a retail sale to a customer. The retailer does not hold inventory and places an order with a supplier and asks the supplier to drop ship the merchandise to the customer. The retailer is buying and reselling the merchandise and thus the transaction between the retailer and supplier should be exempt from sales tax – provided the proper exemption documentation is in place.

Topics: sales tax nexus
1 min read

Sales Tax Nexus and Direct Marketers

By Brian Greer on Tue, Jan 26, 2016 @ 04:17 PM

Sales tax compliance questions often start with a review of a company’s sales tax nexus footprint. TaxConnex frequently works with direct marketers to assist them with their sales tax compliance.

Topics: sales tax nexus
1 min read

Ready for a Sales Tax Nexus Check-Up?

By Brian Greer on Wed, Jan 20, 2016 @ 10:14 AM

If you didn’t review your sales tax position at the end of the year and make changes prior to January 1, it’s not too late. It’s never too late to improve your sales tax position. While January 1 is an ideal time to implement a new process, the longer you wait the greater your potential of increased (and unnecessary) sales tax risk.

Topics: sales tax nexus
1 min read

Economic and Sales Tax Nexus

By Brian Greer on Thu, Jan 14, 2016 @ 02:00 PM

In determining whether a business has sales tax nexus in a particular state, historically, I would have said if a company has income tax nexus in a state then they will also have sales tax nexus in that same state.

Topics: sales tax nexus
2 min read

Sales Tax Nexus and Drop Shipments

By Brian Greer on Thu, Nov 12, 2015 @ 10:13 AM

 

Topics: sales tax nexus sales tax
2 min read

Internet Sales Tax - Amazon FBA

By Brian Greer on Tue, Nov 10, 2015 @ 10:30 AM

 

Topics: sales tax nexus sales tax
2 min read

The Reality of Double Taxation

By Jeff Meigs on Thu, Oct 01, 2015 @ 10:00 AM

I frequently talk with companies who sell to end-user/consumers who have told me that they don’t have any sales and use tax risk because they pay sales tax to their vendors – while they failed to charge sales tax to their customers.  They are comforted by the fact that “the state got their tax revenue and therefore shouldn’t come knocking for more”.  When I tell them that they still have a sales or use tax liability, they are surprised.  When I tell them they may not get ANY credit for the tax they paid to their vendors, they get irate – “What do you mean I still owe the tax – that’s double taxation!”

Topics: sales tax nexus sales tax sales tax audit
2 min read

Don't Forget Sales Tax When It Comes to Year-end Planning

By Robert Dumas on Thu, Sep 17, 2015 @ 11:05 AM

 

Topics: sales tax nexus voluntary disclosure VDA
1 min read

Supplement to “The Technology Sales Tax Footprint”

By Brian Greer on Tue, Jul 21, 2015 @ 10:07 AM

In our recently published white paper titled “The Technology Sales Tax Footprint” we described the constantly changing environment related to the applicability of sales tax to various technology related “services”. As state and local jurisdictions continue to push the boundaries of sales tax nexus and expand the definition of what’s taxable, businesses need to monitor the situation proactively. Two recent updates in Chicago are interesting:

Topics: sales tax nexus technology companies chicago
1 min read

EYE ON Alaska Sales Tax

By Jeff Meigs on Thu, Jul 09, 2015 @ 10:30 AM

Alaska is one of five states (Delaware, New Hampshire, Montana, and Oregon) that do not impose a traditional sales or use tax. Since there isn’t a state level sales or use tax, you might conclude that you don’t need to worry about sales or use taxes when doing business in Alaska. However, like Alabama, there are numerous local or “home rule” jurisdictions within Alaska where sales and use tax is imposed (see our Eye On Alabama Sales Tax for a definition of “home rule”). Local jurisdictional sales tax rates range from 0.5% to 7.5%.

Topics: sales tax nexus sales tax home rule Alaska
1 min read

Recommended Sales Tax Beach Reads

By Brian Greer on Tue, Jun 02, 2015 @ 10:00 AM

Sales tax compliance often takes a back seat to income tax compliance.  While you work to reduce your effective income tax rate, sales tax liability may be growing exponentially.  If left unchecked for too long, sales tax can have a significant financial impact on an organization.  With average, combined sales tax rates in the 9% range + penalties and interest - an unexpected sales tax audit could easily reach 15% to 20% or more of revenue in a state.

While these white papers may not be on Amazon's top recommended beach reads... you might find they save you significant money and excruciating pain in the future.

Here is a list of TaxConnex's top downloaded Sales Tax white papers:

  • Top 5 Sales Tax Nexus Creating Activities - Sales tax all begins with nexus.  This white paper provides a great overview of the common areas where we see companies get tripped up from a sales tax nexus perspective.
  • 5 Steps to Sales Tax Compliance - Keeping with the "5" theme, this guide overviews how to achieve sales tax compliance for a business that is currently out of compliance.
  • Voluntary Disclosure Agreements - This popular white paper outlines the VDA (Voluntary Disclosure Agreement) process and provides simple steps to follow along the way.

Hope you enjoy!


Topics: sales tax nexus compliance sales tax sales tax voluntary disclosure
2 min read

Sales Tax Nexus Lunch and Learn - Feed Your Mind

By Brian Greer on Fri, Oct 03, 2014 @ 01:39 PM

We’ve been conducting Lunch and Learns throughout the country over the last several months focused on sales tax nexus issues. We were last in Boston and we’re planning an event for the San Francisco – San Jose area right now. (BTW, if you have suggestions for a location and venue in the Bay-area please let me know.) We generally start with a basic overview of why sales tax nexus is important. I usually describe to the audience that without sales tax nexus a state has no ability to subject you to their sales tax rules. (At least that’s how things are now until further notice…..pay attention to the Marketplace Fairness Act.)

From there we discuss a more clinical definition of sales tax nexus citing the National Bellas Hess and Quill cases as the standards by which we live by today. We then turn to the discussion of what creates sales tax nexus. This is always interesting. Most people are aware of the typical sales tax nexus creating activities like physical offices, employees, and inventory. However, there are more subtle issues like Amazon laws, click-through nexus, traveling sales reps, attending trade shows, and engaging third parties to sell or perform services on one’s behalf. Here’s a link to our nexus questionnaire and our video series on Youtube that discusses sales tax nexus.

Topics: sales tax nexus lunch and learn Marketplace Fairness Act