The Sales Tax Nexus law has been adopted in 30 states across America with the potential to be enacted in the remaining states in the near future. What does this law signify for small businesses and entrepreneurs?
A Supreme Court decision, South Dakota v. Wayfair sales tax case, carried long-range effects across the whole of the United States. This court case rescinded the “physical presence rule“.
The Physical Presence rule is a rule that determines tax presence based on jurisdiction.
Rescinding the physical presence rule opened the door for taxation on remote sales of taxable merchandise. The current trend towards resale on sites such as Etsy, eBay, Amazon, and etc. will mean that countless small businesses and entrepreneurs that rely on out-of-state taxable retail sales will be adversely affected by the sales tax Nexus laws enacted within their jurisdiction.
What Small Businesses Need to Know
The Nexus sales tax deductions will differ from state-to-state. Businesses attempting to navigate the new sales tax liability themselves may find that they will require professional services for accurate reporting.
The states listed below have enacted Nexus economic and use tax requirements. The starred states have already begun collections on the remote sales tax law. While many states share similar Nexus sales tax deduction and thresholds the Nexus tax calculations are not universal.
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*
Ohio *
Pennsylvania *
Rhode Island *
South Carolina
South Dakota
Tennessee
Utah
Vermont *
Washington *
Wisconsin *
Wyoming
How Can Entrepreneurs and Small Businesses Prepare for Nexus Tax Requirements?
Small businesses that engage in out-of state taxable retail sales will be faced with additional sales tax requirements. Many business owners have already turned to sales tax outsourcing as a solution to this complex tax requirement. The benefits of using a Professional Tax agency are immeasurable.
Be Pro-Active
+The Wayfair sales tax case has unleashed new sales tax law that make meeting tax requirements a moving target. As new additional states begin to enact their own set of Nexus tax laws this will require that taxpayers stay a step ahead of the ever changing requirements.
+ On top of saving a business owner time, a Professional CPA can provide complete tax planning services. A tax expert will employ an up-to-date sales tax calculator keeping a taxpayer on the right side of state tax law payment requirements.
+ It is a CPA’s job to stay abreast of the latest in tax law, therefore, they would be the perfect partner in a small business or entrepreneur to have on their side in case of an audit.
+ A business owner can have the peace of mind in the fact that their sales taxes are filed correctly and on time. A professional can expertly advise on taxpayers on current tax law and sales tax deduction changes by making use of up-to-the minute calculations of a sales tax calculator. Sales tax outsourcing can even save a business owner money. How so? Failing to pay Nexus multi-state sales tax correctly can cost a small business significant financial loss.
Most professional agencies provide a free consultation. Pick up the phone and schedule a meeting to discuss your individual tax needs. A sales tax expert can help rest assured that your multi-state retail nexus’ taxes are filed according to current tax regulations