Sales Tax

Do you have Nexus in the areas you are shipping too?

Are you sales tax compliant?
Is what you sell required to collect sales tax?
Have you paid sales tax on your taxable purchases?
  • So...the inevitable question -
    “Do I have to collect sales tax?”

Just remember, you don’t pay the sales tax, your customers do. So the faster you know if you’re supposed to collect the better. That way you are not ending up paying sales tax when the State(s) come after you.

And don’t be like some and say “oh, I’m small they will never find me”. And then just throw up your hands and ignore your obligations, or you may well find yourself in a sales tax audit.

Initial sales tax considerations include:
  • Your State
  • Your Product/Service
  • Where you sales are
  • Sales tax management

We continue seeing an uptick in sales tax audits, where states like Texas are outsourcing this to outside contractors who make commission on the amount of sales tax they find you owe. These people are financially motivated to find every dime of sales tax you owe. And we are finding States are going after more than just your product/service sales tax.

  • Taxable Purchases...What??
Have you given any thought to sales tax you owe on your Taxable Purchases?
I know, you are thinking...what is a taxable purchase and why does this apply to my business?

Texas defines a Taxable Purchase as something purchased from Texas or out-of-state sellers, or items taken out of inventory for use, items given away, and items purchased for an exempt use but used in a taxable manner not include inventory items being held exclusively for resale

What does that mean...Have you ever bought anything from Amazon that you previously didn’t pay sales tax on because that seller was outside your state, and that you used for business purposes? Yep, you owe sales tax on that purchase if you live in Texas (and most other states have similar laws).

  • E-commerce and Retail

Simplify your operations by syncing your marketplace data to get complete Nexus analysis and determine in real-time where you need to register, collect from, file and remit taxes too each month.

If you are Selling Online on Amazon, eBay or other platforms, either in the USA, Europe or other countries, our 3rd party technology solutions can easily pull your data and determine where your Nexus exists and if you should be collecting sales tax from those customers or not.

Are you selling via FBA with Amazon? Did you know storing your products in their warehouses creates Nexus with that State..? If you are over the State’s threshold for sales (they are all different) you need to know who to collect from so this money is not coming out of your profits in the future.

  • Professional Services

Accounting | Bookkeeping is crucial to making sure you are invoicing, collecting and reporting sales tax properly. If you do not have your numbers organized, this can become a real headache each month trying to figure out what is truly owed (from a cash-basis perspective).

Are you a contractor purchasing materials for a job and paying sales tax on those material purchases? Did you know you should not be because only the “end-user” is responsible for paying the sales tax, and that if you were ever audited you would owe the sales tax to the State - again ...yes, they’ll happily collect twice on the same sale. We have experienced this with multiple clients who’ve come to us after years in business...

Don’t let this be you! 🙂
  • SAAS and Technology

If you are selling software and technology solutions, while most states have not made definitive answers related to sales tax yet - except for TN & VT - many jurisdictions are realizing they can be collecting a lot more sales tax revenue by taxing these purchases too.

  • Is the software you sell off-the-shelf or customized?
  • Are user rights temporary or permanent?
  • Do you offer IT solutions like installation, hosting services, or maintenance contracts? Or possibly web development?
  • Do you offer installation, hosting services, web development or maintenance contracts?

The subtleties can appear endless when trying to determine whether your situation is taxable or exempt. To make matters worse, when you bundle services or products together, it gets even more confusing. If you offer a mix of products and services, for the best and easiest tracking, separate these items on invoices.

Digital goods and services are taxed different ways based on various jurisdictions too. Are you selling:

  • Software-as-a-service
  • Digital movies
  • Digital photography
  • Digital games
  • Software training
  • Installation of hardware
  • Software maintenance contracts

Having the right SaaS software to manage sales, subscriptions and payments will help give you the ability to sync that data and determine where your sales tax Nexus is for your business.

All of this have you confused? You can thank the June 21, 2018 ruling by the United States Supreme Court (South Dakota v. Wayfair, Inc.)

What our clients say about us

Insogna CPA
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5.0
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By no means am I implying that their work is bad, they will file your taxes on time and successfully. Unfortunately, they’re a little expensive for the work…
Lucas L.
Lucas L.
Ami helped me prepare my taxes for the past few years (including a real estate investment property and capital gains) and I’ve appreciated her patience…
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Megan M.
I had the pleasure of working with Chase/Adam/Abby after being referred to them by another CPA who didn’t quite specialize in what I need (already a good…
Bill P.
Bill P.
Chase Insogna and his team of accountants and bookkeepers are on top of it. I have a software technology services as well as a product company and…
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Boris P.
Outstanding service, knowledge and support. I would highly recommend this firm to anyone for personal or business tax or financial assistance. A big…
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Jerome H.
Insogna CPA made my experience of creating an LLC fast and easy. I was feeling very intimidated and unsure about the process but was pleasantly surprised at the straightforward process and reasonable price. This will be my first stop for any accounting needs!
Jennifer Brown
Jennifer Brown
We’ve used Insogna CPA for over 7 years and wouldn’t go anywhere else. They are unfailingly professional, thorough and patient. No matter how many questions…
Jodi C.
Jodi C.
I like to do as little as possible when it comes to taxes. Insogna does everything and on time. All we had to do was scan a few documents and answer a reasonable and brief questionnaire. SATISFIED.
Doug Windland
Doug Windland
I’ve been through MANY cpa’s and finally landed on Insogna. There’s never any surprise bills, all expectations and prices are clear and reasonable up…
Dustin B.
Dustin B.
As of 2019, I have used Ingsogna to file my taxes for three years. I keep coming back because it’s easy, affordable and accurate. The electronic document room is a great place to store everything. I have always worked with Ami and she’s always professional and courteous. I used TurboTax for years and that was fine, but as life changed, compensation increased and the tax laws continued to evolve, I found that Ami has saved my family money each year.
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Christia Churchill
I have worked with the folks at Insogna for almost 4 years and I could not be happier with their services. Very responsive if we have a question and exceptionally friendly. They give me the flexibility to stay focused on my business knowing that are keeping our books in-line.
Kris Byrd
Kris Byrd
I’ve used Insogna CPA’s bookkeeping, tax preparation, and professional services for my business (Bravery Media) and personal finances since 2012. They have always been helpful, quick to respond, and impeccable in their work. As a small business owner, it’s nice to not have to worry about accounting while I’m trying to generate more business. I’ve recommended Chase and his staff to dozens of people since I started working with them.
Joel Goodman
Joel Goodman
I’ve used Insogna CPA’s bookkeeping, tax preparation, and professional services for my business (Bravery Media) and personal finances since 2012. They have…
Joel G.
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