Did You Hit Nexus? Why That's The Million Dollar Question 🤔

Tax rules changing faster than summer weather? We’ve got you covered. ✅

Dive into this month’s updates and discover how economic nexus laws are changing in 2025. Plus, we’ll also answer a question from you.

Fresh tax insights to keep you compliant are just a scroll away! 👇

SALES TAX NEWS

1️⃣ The Texas Comptroller released a publication detailing the rights and remedies available to taxpayers who disagree with the findings of a tax audit, examination, or refund claim. Before receiving a formal notification, the Comptroller encourages taxpayers to collaborate with audits to seek an early resolution through Reconciliation Conference, Taxability Guidance, or an Independent Audit Review Conference (IARC).

2️⃣ The Colorado Department of Revenue (DoR) issued a General Information Letter on whether electricity sold at electric vehicle charging stations by entities other than electric companies is subject to sales tax. Per the letter, fees for using electric vehicle charging stations are generally not subject to Colorado sales tax. However, charging station operators who do not make taxable sales must pay Colorado sales tax on the electric service they purchase.

3️⃣ Arkansas has enacted the Grocery Tax Relief Act to exempt sales of food and food ingredients from state-level sales and use tax starting on January 1, 2026. Local sales and use taxes will still apply to sales of food and food ingredients. It also does not apply to the sales of prepared food.

4️⃣ In Arkansas, a sales tax exemption has been created for qualifying nonprofit organizations with operating budgets under $200,000 that provide charitable community services to state residents in need. While the exemption covers most tangible goods and services, certain items remain taxable, including vehicles, alcohol, computers, construction materials, and electronics. Organizations must apply for an exemption certificate, and the law takes effect in the first calendar quarter following 90 days after the 2025 Legislature adjourns.

5️⃣ The Illinois Department of Revenue has confirmed that federal tariffs must be included in retailers' taxable gross receipts when calculating Retailers' Occupation Tax, even when separately stated on invoices. The guidance clarifies that tariffs are considered part of a seller's business costs and cannot be deducted, with one exception: when the end customer directly imports goods as the consignee, the tariff isn't subject to ROT but may be subject to Use Tax on the purchase price only.

6️⃣ Alabama will eliminate state sales tax on essential family care items, including baby bottles, formula, breast pumps, diapers, baby wipes, and maternity clothing, beginning September 1. The tax exemption will also cover menstrual hygiene products.

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$330 MILLION TAX BILL?! WHY E-COMMERCE BUSINESSES CAN’T IGNORE ECONOMIC NEXUS 🤔

Are you selling products online across multiple states and concerned about your tax liabilities? You’re not alone. The evolving landscape of e-commerce taxation is reshaping how online businesses operate across state lines.

But what exactly is economic nexus? Economic nexus occurs when your business reaches certain thresholds in a state, typically a specific dollar amount in sales or number of transactions, creating a tax obligation even without a physical presence.

As an e-commerce or SaaS business, economic nexus can significantly impact your compliance requirements and operational costs. You’re not just facing new tax collection responsibilities but the administrative burden of tracking sales across multiple states, each with its own thresholds and rules.

But the nexus situation is constantly changing. States are beginning to remove transaction thresholds, recognizing the undue burden some businesses have. Understanding where you stand is crucial, as non-compliance penalties can be severe, with some cases resulting in hundreds of millions in liabilities.

Get the full scoop on economic nexus and how it’s changing with Nicole Power, Head of Filing at Zamp and former Illinois Tax Auditor, here →

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UPCOMING EVENTS 🎉

YOUR QUESTIONS, ANSWERED!

Q (Elise): What is an exemption certificate?

A: An exemption certificate is the form presented by an exempt buyer to the seller when making a tax-exempt purchase.

The Federal Government is an exempt organization, while state and local governments are sometimes exempt organizations. This can also apply to businesses if they are either (a) buying products to sell for resale directly, or (b) using them in the making of products for resale, provided that they have a valid exemption certificate (aka resale certificate).

Learn more about resale certificates here→

Thanks for reading along.

I’ll be back next month with more sales tax shenanigans.

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Until next time’s 🗑 …

Rohit & the Zamp team