More channels, more problems 🫠

Happy Labor Day Weekend, trash enthusiasts.

While most folks are traveling out of town, hanging by the pool, and relaxing, I can’t help but think…

Sales tax never has a day off (unless it’s a sales tax holiday…or if you’re lucky enough to be in one of the few states with no sales tax).

On that note, you won’t want to miss this month’s (1) sales tax updates (2) must-read tips for multichannel sellers and (3) a Q&A below.

SALES TAX NEWS

1️⃣ In Pennsylvania, services provided by a tech company including installation, setup, and training related to licensed software were ruled taxable.

2️⃣ A new law in Missouri exempts streaming and satellite TV companies from local franchise fees. This follows legal actions by Missouri municipalities that sought over $50 million in fees from companies like Netflix and Hulu.

3️⃣ A new bill in Tennessee follows Streamlined Sales Tax sourcing rules for retail sales of products from outside of Tennessee into Tennessee.

4️⃣ A midyear report found that among major cities, Seattle, Washington, imposes the highest combined state and local sales tax rate, at 10.35%.

5️⃣ The same midyear report also found that among major cities, Honolulu, Hawaii, has the lowest rate, at 4.5%, imposed entirely at the state level.

6️⃣ A Pennsylvania taxpayer’s petition for a refund of sales tax paid on Perrier non-flavored mineral water was denied. The Court concluded that Perrier is carbonated water and, therefore, falls within the definition of a “soft drink”— making Perrier subject to sales tax.

7️⃣ Effective January 1, 2025, Illinois retailers who maintain a place of business in Illinois and sell tangible personal property from locations outside Illinois will be required to collect all applicable state and local taxes at the location where it is shipped or delivered.

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MO’ CHANNELS MO’ PROBLEMS 💰

Selling across multiple channels = more revenue opportunities.

Sounds great, right?

Despite the benefits of a multichannel approach, it can also create a bigger headache when it comes to sales tax compliance.

Increasing your customer base and expanding your reach to new locations can directly impact your sales tax requirements. 

Post-Wayfair, companies need to comply with the economic nexus thresholds each state has defined. Most states have their economic nexus threshold set at either 200 orders or $100,000 in sales.

If you’re selling on your own website platforms (i.e. Shopify, BigCommerce), several marketplaces (Amazon, Walmart), and social channels (TikTok, Meta), you have a higher chance of exceeding the states’ thresholds.

So, what should you do to stay compliant as your business grows?

We’re breaking it all down below.👇

Your mutlichannel selling must-haves →

PARTNER SPOTLIGHT

Irish Titan builds and grows ecommerce channels, using only Titans (no contractors, freelancers, or offshore resources). They bring their full suite of designers, engineers, and ecommerce strategists to you.

Ready to start growing the kingdom? Get in touch or reply to this email for a direct intro to their team.

YOUR QUESTIONS, ANSWERED!

Q (Ashley): How do you decide between Economic Nexus and Physical Nexus?

A: If you meet one of the two, you have nexus in the state. You do not have to meet both to have nexus. Just one.

If you have a physical presence in a state (e.g., store, employee, inventory), you have physical nexus. Typically, if you exceed $100,000 in sales or 200 individual orders over a year in a state, you may have met the state’s economic nexus threshold.

Get the scoop on sales tax nexus →

Thanks for reading along.

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

If you enjoyed this one, please share it with your network. 🤝

If you found it helpful, reply back and let me know. I live for the people.

If you have any feedback, suggestions or questions, please let me know by responding to this email or DM me on Twitter or LinkedIn.

Until next time’s 🗑 …

Rohit & the Zamp team