Historically, there was a significant difference between the sale of products and services when it came to sales tax. While this is still mostly the case, there are a number of exceptions (and a growing list of examples) in which a service is subject to sales tax. If you operate a service business that may…
It’s every online retailer’s nightmare: a dreaded audit or costly penalties and fines for erroneous sales tax reporting. And yet, the ever-changing landscape of sales tax regulations that affects ecommerce retailers means that errors in reporting are a real possibility for even the most conscientious of vendors. Is there a way retailers can protect themselves…
One of the biggest challenges faced by small businesses, especially those actively trying to grow, is cash flow. Poorly managed cash flow can result in significant issues, and it is frequently listed as one of the biggest challenges for businesses. With small business failure rates at or above 50% in most developed countries and cash…
There are many forms of taxation in the United States, some collected by the federal government and others by local governments and States. One tax in particular that affects the consumption of specific goods is the excise tax – a very specific, often very targeted tax that you pay sometimes without realizing it. How is…
A number of scholars and economists have brought to attention the lack of a VAT in the United States. Currently implemented by every other nation in the OECD (Organization for Economic Co-operation and Development), including much of Europe, some argue that a VAT would help to increase revenue and revise the overly complex US federal…
Sales and use tax is complicated enough. Ecommerce shops have to determine whether they have a nexus in all the states they ship to, keep track of sales tax holidays for those states and figure out the complexities of a state’s sales tax exemption rules. However, what happens to the sales tax when a customer…
Sales and use tax exemptions can be a complex issue for ecommerce retailers to understand, but it’s critical that they do. Without proper documentation, exemptions can fall apart and retailers can then find themselves in the midst of a costly audit. The problem is that all states have different laws and codes defining when and…
Ecommerce shops that sell software may run into complex rules regarding sales and use tax. It’s tempting to believe that “intangible” software, such as downloads and streams, are not subject to sales tax, but that is not always correct. As services available via cloud computing grow, states are looking to recoup lost sales tax revenue…
As summer approaches, many of us are looking to the horizon, ready for vacation. But if you’ve been on a road trip recently, you may have had to endure some less-than-perfect driving conditions. Our roads and highways are one of the infrastructure items that are paid for with taxes. But declining revenues mean that states…
Drop shipping is a great way for e-commerce businesses that have limited or untested inventory to expand their customer offerings. By retailing products that are carried and housed by a third party distributor, such as a manufacturer, wholesaler, or fulfillment house, retailers can use drop shipping as away to grow their customer base, bring in…