The biggest sales tax challenge for retailers is often knowing how much tax to charge for any given order. A not-distant second challenge is figuring out what you owe when it comes time to file your sales tax return. On the surface, this seems fairly straightforward. Collect the sales tax on each order, add it…
In most cases, a business needs to collect sales tax in the states in which they are located. This concept, called nexus, means that if the business has a physical presence in a state, that state can compel the business to collect sales tax from its customers. Nexus is pretty cut-and-dry when you’re thinking about…
Naturally, sales tax applies to products, and while rules may vary, they are fairly straightforward in terms of when it is required. What’s more challenging, however, is knowing when services are taxable. In the past, services typically did not incur sales tax, but as small businesses make headway into industries that were formally only controlled…
Towns around the country in need of an economic boost have been trying to entice large-scale retailers to bring stores into their areas with promises of sales tax exemptions and other perks. These incentives are being hotly debated at the local government level. At issue is the loss of revenue to the state from these…
If your business sells gift cards or gift certificates, you may be wondering: Should you charge sales tax on gift cards? A gift card is not considered goods for sale. Instead, it is a purchase meant to be used for payment in the future. Therefore, gift cards and gift certificates should not have sales tax…
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…
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…
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…
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…
The term “sales tax sourcing” is used to describe which tax rates are applied to a given purchase, and to which jurisdictions the tax money collected is owed. When you ship a product to another address, the knowledge of your tax rules becomes very important in both the sales tax calculation and when completing your tax returns.