Sales Tax Basics for Retail Owners
Have you ever been confused by sales tax and nexus? Who hasn't been?! We are here to help you get sales tax and use tax compliance right, because it is important. Sales tax can be really confusing because it's always changing!
You are basically the middle man for the government. They impose sales tax on customers - you collect it from the customer and turn around and pay it to the government. You're responsible for filing returns. That can be monthly, quarterly, semi-annual, or annual. Each state varies with what services or items are taxable or not, so you have to make sure you're following those guidelines.
How do you know you have a significant presence? Nexus is ongoing so you could hit it all throughout the year. It's not just a once a year thing that you look at. As soon as you hit the 200 orders or the gross sales thresholds then you need to start registering in that state. Each state has different thresholds.
What if you don't have a physical employee or store in a state? If you have a big enough presence because you have so many customers buying from you then you hit economic nexus and they want you to start collecting sales tax on those customers in the different state and filing and paying them.
Now is the time to audit yourself to make sure you are collecting sales tax for other states. Every state has a limit to transactions before sales tax. You need to hunt and see if you've hit any limits in other states. This is what we do for our clients quarterly or annually - we track when they need to start paying sales tax in OTHER states so we stay on top of things so you don't have to.
Need a comprehensive guide to sales tax? Download the HarQuin Nexus Guide for free! Need to outsource your sales tax? We can lift that burden and keep track of all your sales tax to keep you compliant. Here’s a link to the sales tax form to fill out, so we can get started working together.