Alright, let’s talk about Nexus. It’s one of those words that makes you think, “Do I really need to know this?” But if you’re running an eCommerce business, trust me, you do.
Nexus is all about where your business has a connection that requires you to collect and remit sales taxes. And if you’re selling online, there’s a good chance you have Nexus in multiple states (even if you’ve never set foot there).
Confused already? Don’t sweat it. By the end of this post, you’ll not only know what Nexus is but also how to handle it like a pro. Let’s dive in.
Nexus, Explained Like We’re at a Coffee Shop
In simple terms, Nexus is your business’s footprint in a state. Think of it as the “you were here” marker that makes states say, “Hey, you owe us sales tax.”
Here’s how you can create Nexus:
- Physical Nexus
If you’ve got an office, employees, inventory, or even a warehouse in a state (hello, Amazon FBA), you have physical Nexus. - Economic Nexus
This one’s fun. Sell too much in a state, and—bam—you’ve hit a sales threshold. For example, if you sell over $100,000 in California or process 200 transactions there, you’ve just earned economic Nexus. - Affiliate Nexus
Got affiliates promoting your products in another state? Some states consider that enough of a connection to slap you with Nexus. - Temporary Nexus
Sell at a pop-up shop or a trade show in a state, and you might need to collect sales tax there, even if it’s just for a weekend.
Why Should You Care?
Here’s the deal: if you have Nexus in a state, you’re legally required to collect and remit sales tax for purchases made by customers there.
And if you don’t? Let’s just say states don’t take kindly to businesses skipping out on their tax obligations. You could face audits, fines, or penalties that make even your busiest sales day look like pocket change.
But it’s not just about avoiding trouble. Collecting taxes where you don’t have Nexus can frustrate customers, not to mention create a mess in your books. That’s why you need a clear Nexus strategy and someone who knows the ropes (hint: that’s us).
How to Handle Nexus Without Losing Your Mind
Step 1: Find Out Where You Have Nexus
This is step one, and it’s crucial. Use tools like Avalara or TaxJar to identify states where your business has Nexus. If that sounds daunting, don’t worry. Insogna CPA is here to help you figure it out.
Step 2: Register for Sales Tax Permits
Once you know where you have Nexus, you’ll need to register with those states to collect and remit sales taxes. This step can be a bit tedious, but hey, it beats getting hit with penalties down the road.
Step 3: Automate Your Tax Collection
Here’s where life gets easier. Tools like QuickBooks Online and Shopify’s tax settings can calculate sales tax for you, ensuring you collect the right amount every time.
Step 4: Call in the Pros
Nexus rules change all the time, and trying to keep up while running a business is… well, impossible. That’s why partnering with a trusted CPA in Austin, Texas (like us!) is one of the smartest moves you can make. We stay on top of the rules so you don’t have to.
Why Work with Insogna CPA?
At Insogna CPA, we’ve worked with eCommerce businesses of all shapes and sizes to handle their Nexus and sales tax needs. Whether you’re just expanding into new states or already dealing with multi-state compliance, we’re here to make it simple.
Here’s the thing: we don’t just crunch numbers. We care about helping you grow your business without stressing over taxes. From automation tools to hands-on guidance, we’ll give you the confidence to handle Nexus like a pro.
Let’s Simplify Sales Taxes Together
Look, we get it, sales tax isn’t the most thrilling part of running a business. But it doesn’t have to be the most stressful, either.
With the right tools and the right team (hey, that’s us!), you can tackle Nexus obligations without breaking a sweat.
Schedule a meeting with Insogna CPA today and let’s handle your sales tax headaches together. Whether you’re searching for a small business CPA in Austin, need advice from a tax advisor in Austin, or want expert help from one of the top Austin accounting firms, we’re here to make your life easier.
Because you’ve got better things to do like growing your business. Let us take care of the taxes.