Summer is here and with it comes summer storms – of the meteorological kind and the business administration kind. We’re talking about sales tax. If you sell products, then July is most likely a busy time for you and your sales tax filing duties!
But never fear, at TaxJar we have your back when it comes to handling all the vagaries of sales tax. Here’s what you need to know to navigate July’s sales tax perfect storm. Continue reading
All businesses pay a federal income tax, whether its as its own entity or through the income tax of the owner. But, sales tax is a completely different story. Sales tax is determined by each individual state and the requirements for multiple state businesses are often complicated. Those requirements get further complex when you are an online business as you may not have any physical presence in the state itself. Whether or not your online business has to pay sales tax all depends on the states’ definition of one word: nexus.
Your eCommerce store is growing! That’s a good thing, right?
Well, for the most part, darn right it is. But as you’ve probably noticed, as your little online store grows up, so does the complexity of running it behind-the-scenes. And one of the most complex aspects of running a thriving online store is dealing with sales tax.
Today we’ll help you pinpoint some of the more onerous aspects of handling sales tax compliance in your growing eCommerce store, and what you can do to put a lid on sales tax.
Problem: You have sales tax nexus in multiple states
Let’s say that when you started your business you lived in and ran everything about your business – sales, fulfillment, customer service – out of your garage in California. Sales tax in this instance is simple. You have sales tax nexus in California and must collect sales tax from buyers in California. If you sell to a buyer in another state where you don’t have any significant connection, like Virginia, then you don’t collect sales tax. Simple, right? Continue reading
Guess what? You have sales taxes due soon. Did you forget? It’s hard to blame you – it’s been a year since you last paid!
Did that intro cause you to freak out a little? That means you’re one of the lucky business owners who only have to worry about sales tax on an annual basis. On the other hand, only having to deal with sales tax once a year has its downsides. Often this means you simply forget what to do when sales tax time rolls around. Continue reading
When we started our Autopilot sales tax solution, TaxJar, we talked to merchants of all kinds. And one of the things we found out over and over again was that sellers were spending hour after hour on sales tax compliance. Continue reading
Guess what? You owe sales tax to at least one state this month.
Did that get your heart going? Then you’re like business owners all over the country trying to get sales tax under control but struggling to do so. It’s one of the most annoying aspects about doing business these days, particularly for eCommerce businesses.
Why? Because so many states are trying to get as much money as they can, including from online business owners who sell taxable goods to customers in their state. Do you have an employee in one state? You likely have sales tax nexus there. Do you store your inventory in a warehouse in another state? Then you’re likely required to collect sales tax in that state, too.
Some states want your payments monthly. Some want them quarterly. Some even just annually. But if you’re paying sales tax to a bunch of states, how are you supposed to keep up with all these due dates?
Although federal taxes are not dependent upon where you live in the United States, there are some drastic differences between how states collect taxes from their citizens – considering the different rates they tax for income, property, luxury goods, and even common necessities such as food and clothing. If you have flexibility about where you live, perhaps it is worth it to move to a state with lower taxation rates in categories that apply to you and your family.
Our next state is famous for producing 33% of the potatoes grown in the U.S., and 85% of commercial trout. This state is also home to the famous Salmon River- the longest free-flowing river to flow within a single state. Who is our mystery state bachelor? None other than Idaho!
Idaho is located in the northwestern region of the United States. It comes in as the 14th largest, 39th most populous, and the 7th least densely populated of the states. Its capital is Boise.
As far as starting a business in the potato state goes, Forbes ranks it at number 19 for the best states for business due to its average rankings of business costs, labor supply, regulatory environment, economic climate, growth prospects, and quality of life.
This post is brought to you by our partners at TaxJar – an online tool built to make sales tax filing easier for online sellers.
Running your own online business is tough enough. Staying compliant with state sales tax laws makes things even tougher. These days online sellers are branching out, selling on multiple platforms like eBay, Amazon, Etsy, and Shopify in addition to their own websites. At the same time, states are changing sales tax laws so that more online sellers will be required to collect and remit sales tax. That’s resulting in more and more businesses having to pay sales tax to multiple states.
Before you’re head starts spinning, here are some simple tips to keep in mind when it comes to sales tax compliance and your online business.