How do I know whether my company should be collecting sales tax?


Nexus States

Consider the following when determining whether to collect sales tax:


Location of your home state.  If you have sales in your home state and your state imposes as sales tax, you may likely have a sales and use tax responsibility.

Number and amount of sales outside of home state
.  About half of the states have rules requiring out-of-state sellers to collect sales tax based on the amount of sales or number of transactions in the state. These rules upheld in Wayfair Supreme Court case in June 2018.


People, property, inventory.  Even if your revenues and transactions do not meet the sales threshold mentioned above, the "old" physical presence standard of having employees, contractors, affiliates inventory, equipment, or other property in the state still apply.


My company sells online. How can we manage sales tax calculations?



There are a number of sales tax solution options available in the marketplace to assist with calculations of sales and use tax.  The right solution depends on a number of factors including: industry, ERP/accounting system/shopping cart/marketplace provider, type of customers, product or service offerings, and number of filing states. Sales tax software providers include: Avalara, Onesource, Taxify, TaxJar, Vertex and Others.

Taxnologi is an Alliance Partner with all of the above.


You know you should be doing something but don't know where to start?




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