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.