Sales Tax Trash Talk
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The wild west of sales tax mistakes 😳

The wild west of sales tax mistakes 😳

Sales tax news, common mistakes, and more...

Rohit Bhadange
April 07, 2024

Howdy, sales tax nerds. 🤠

Today, we’re taking you on a journey through the wild west of sales tax with 1) sales tax updates (2) common mistakes and (3) a question from you.

SALES TAX NEWS

1️⃣ Amazon lost their South Carolina appeals court panel ruling, and owes the state $12.5 million in sales tax for marketplace sales made before the 2018 South Dakota v. Wayfair decision.

2️⃣ Under a new proposal from the Streamlined Sales Tax Governing Board, states could collect tax on sales of digital codes representing software, in-app purchases, and non-fungible tokens(NFTs) at the time the code is sold.

3️⃣ Nevada sales tax revenue in December was a whopping $15 million higher than in the same month the year before, according to a report from the state Department of Taxation.

4️⃣ In a new bill passed by the state House of Representatives, Kansas would exempt food from state sales tax.

5️⃣ A new budget proposal in The District of Columbia would boost its sales tax rate in an effort to eliminate its projected budget shortfall.

6️⃣ A CEO in California was found liable for his store's unpaid sales tax liability, since he was the point person for sales and use tax matters.

7️⃣ The Colorado Department of Revenue announced that retailers who make sales into Colorado but whose business activities do not meet the statutory definition of doing business in the state can voluntarily collect sales taxes.

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WELCOME TO THE WILD WEST 🐴

A record-breaking 5.5 million new business applications were filed in 2023.

Of these companies, a portion will sell interstate, experience rapid growth, and eventually need to address multi-state sales tax...

But multi-state sales tax compliance is extremely complex—and it’s easy to make mistakes even when trying to manage it accurately and on-time.

As a result, The Wild West of Sales Tax has become a reality as business owners struggle with sales tax requirements.

Common mistakes include:

Collecting sales tax but not registering in states to remit
Not registering in states after triggering nexus
Not mapping product tax codes to support exemptions
Past due state filings accruing interest and penalties

Fortunately, there's a better way forward. Check out the article below to learn more.

A better way to manage sales tax →

COMMUNITY SPOTLIGHT

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YOUR QUESTIONS, ANSWERED!

Q (Malia): 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, permitting that they have a valid exemption certificate (aka resale certificate).