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.
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.
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 actually used in a taxable manner. This does 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).
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.
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...
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.
The nuances can seem endless when trying to determine whether a sale is taxable or exempt. And beware of bundling. If you provide a mix of products and services, break these items out separately on invoices.
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.