Sales Tax Blog
Sales Tax and Gift Certificates
Many online retailers reap the benefit of gift-giving, especially for shoppers buying presents for friends and family who live elsewhere. Whether you are a business that focuses primarily on gifts, such as gift basket or flower delivery service, a shop that rarely caters to the gift-giving crowd, or somewhere in between, take the opportunity to upsell your best products for gift-driving holidays, such as Mother’s Day, Father’s Day, Christmas, and others. Of course, many would-be gift givers are too lazy and will just wind up purchasing last minute gift cards. Most shops offer these and they should not have sales… Read More
Affiliate Programs and Sales Tax Law
With the growth of blogs and social media, affiliate programs are gaining popularity as additional income for the average person. They are also a great way for an online business to build brand recognition and spread the word about promotions and products nationwide. Unfortunately, having an affiliate program run across the U.S. can make a company subject to the changing complexity of nexus sales tax laws, since many states view such programs as “having a presence” in the state. How can a small company protect itself from getting mired in affiliate nexus tax laws but still offer an affiliate program?… Read More
How to Fix a Sales Tax Error
Businesses are run by humans and are therefore prone to mistakes. When those mistake involves the miscalculation of sales tax, the company in error risks the loss of money or business and can incur the wrath of the state affected. By law, a vendor is not allowed to keep any income that comes from such an error, no matter how small. How can vendors be sure they haven’t made an error? What can they do to fix these mistakes and how do they prevent any in the future? The following guidelines will benefit any ecommerce shop: 1. Double check for… Read More
Understanding Sales Tax Nexus
All this talk about nexus can be confusing for an online vendor. What exactly does it mean and who determines it? “Nexus” is a term used to designate that a company legally has a presence in that state – that is, they are determined to be doing business in the state. When nexus is created for a company, they are subject to that state’s sales tax requirements. While there are constitutional guidelines on how states can define it, states ultimately determine when nexus is established by a company. The standards vary greatly. Some of the ways nexus can be created… Read More
The Current State of Marketplace Fairness
2013’s holiday shopping season saw a rise in online purchases. Across the country, politicians, states and vendors are debating the good and the bad of a comprehensive tax system for online retailers. Smaller online shops feel the current tax system provides additional burden for competing with big online retailers, while states contend that they are losing far too much revenue from online sales. As vendors struggle with the concept of fair online taxes, events have unfolded in 2013 that will affect the outcome. Here is the current timeline of events: May, 2013: The Marketplace Fairness Act (MFA) of 2013 was… Read More
Sales Tax Holidays: Pros and Cons
Over the last few years, it’s become a trend for states to take “sales tax holidays” throughout the year. These brief periods of generally 2-3 days relieve consumers from tax on certain items and are meant to boost the economy. There are limitations and regulations for each of these holidays, but the idea is to encourage consumers to save money and shop more frequently. Where Does it Apply? So far, 19 states held annual tax holidays in 2013, with at least two scheduled in 2014 for Alabama and Puerto Rico – and most likely the other states continuing as well…. Read More
Holidays, Sales Tax and Shopping Online
This holiday season, lots of shoppers will be staying home to do their purchases. With more options for shipping and convenient delivery, and extra bargains, e-commerce store owners and site developers should provide their customers with tools that can help them navigate the confusion of online shopping. One reason shoppers may be hesitant to do heavy Christmas shopping at an online vendor is that they are uncertain what the sales tax will add to their bill and if, in fact, they even need to pay any. In addition, some vendors are confused themselves and may be breaking the law by… Read More
Sales Tax on Pot … and Other Election Results
This week’s election covered several initiatives on sales tax. For a look at the latest stories, here’s what happened across the country at the ballot box: According to the Denver Post, Colorado voters approved a “special excise and sales tax on recreational marijuana” – a substantial tax that is roughly 20% on most products. The state legalized the drug back in May, when regulatory laws were passed to govern its sale and usage. This November, Portland, Maine legalized pot for adults and two other cities decriminalized it. Proponents of legalizing marijuana have long argued could generate an abundance of tax… Read More