Business owner and retail sellers of taxable merchandise have a vested interest in keeping abreast of current tax laws. Many states are hopping on the band wagon and ridding their state laws of the physical presence rule. Simply put, by reversing this rule businesses may be responsible for remitting sales taxes on sales of out-of-state retail transactions. This growing tax movement is called, Nexus Sales Tax.
How Does Sales Tax Nexus Affect your business?
First, let’s determine the meaning of the term sales tax nexus. Nexus in legal terms signifies a connection between two parties. In June 2018, the Supreme Court made a ruling in the South Dakota vs. Wayfair sales tax case that was soon to affect a large portion of business owners in the United States. This case enacted the Nexus law in South Dakota thereby establishing a connection between two entities based on a set of conditions such as sales amount and/or quantity sold to an out-of-state entity. In simple terms, selling taxable merchandise to an out-of-state entity may incur tax fees payable to your home state.
States under Nexus Economic Laws
Currently, the 30 states listed below have enacted the new sales tax law on their books. Possibly in the near future, additional states may add Nexus tax laws to their state tax laws.
Alabama, Colorado, Connecticut, Georgia, Hawaii, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nebraska, Nevada, New Jersey, North Carolina, North Dakota, Oklahoma, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Washington, and Wyoming.
Currently, the states listed below have Enforced the Nexus Tax In their state. Many of these states have Nexus laws on the books; However, not every state is currently collecting remote sales tax.
* Alabama, Hawaii, Illinois, Kentucky, Maine, Maryland, Massachusetts, Minnesota,New Jersey, Nevada, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, Vermont, Washington, Wisconsin.
Sales Tax Outsourcing
Most states are united in the terms and conditions in application Nexus tax requirements, but A few have different requirements. Approximately, 20 states have yet to determine whether to add these new sales tax law. The Wayfair sales tax case has opened the door addition to changes to the sales tax laws throughout the year. Each business operation will be responsible for accurate tax data reporting, timely remittance and proper sales tax deduction. These new laws will add a higher tax compliance complexity for businesses involved in multi-state taxable merchandise sales. Sales tax outsourcing is a simple solution to a complex problem. A professional tax agency is accountable to their clients for up-to-date Nexus law reporting and use of a current sales tax calculator that will ensure accurate tax reporting.
Benefits of Using A Tax Agency to Maintain Accurate Tax Records
Sales Tax Outsourcing to a Professional Agency offers:
* Knowledgeable Tax Professionals to provide a Nexus evaluation. The evolving Nexus law will require Constant tax updates.
* CPA’s to assist in the taxability determination to maintain legal sales tax deduction calculations.
* A Sales Tax Practitioner to determine proper sales tax remittance with the use of a current sales tax calculator.
* Tax Experts to perform Tax Return preparation, Filing and Auditing service