Online Retailer Sales Tax Information You Need to Know Now

Share on facebook
Facebook
Share on google
Google+
Share on twitter
Twitter
Share on linkedin
LinkedIn
Reading Time: 3 minutes

If you are reading this, you are a online retailer dealing with sales tax. Keeping up with sales tax within youre state and rest of other states is an impossible task. Information you need to know now about online selling, sales tax, wayfair and Nexus.

A small business owner has to wear many hats, and you may have to add another one to wear and that is knowing how you will be affected by the new law on sales tax.  As if you didn’t already have enough on your plate, 2019 with wayfair decision from US Supreme Court marks a change in the way states will require businesses to collect sales tax from their customers and report it.

New Sales Tax Impact Report on US Retailer and Canadian Retailer 

With the massive growth of the Internet makes it a lot easier to connect to customers all over the world. Amazon has opened doors for small business owners to sell their products and now they even store vendor’s items in the Amazon warehouses throughout the country. Selling online has stipulations regarding sales taxes, particularly in relation to the new sales tax law. 

Wayfair Decision

The U.S. Supreme court decided that states may collect sales tax from out-of-state (including foreign individuals or companies) retailers, that operate solely remotely online or  physically located in different state, even if the seller does not have a physical presence in the buyer state.

The court decision leaves it to up to each individual state to levy sales tax laws and make decisions about who should pay state sales and use taxes, and collection of sales and use tax. In simple terms, the new supreme court decision only eliminated physical presence as a mandatory requirement in levying sales tax.

Takeaways from the US Supreme Court Case:

  1. The law does not apply retroactively, and
  2. Physical presence is not mandatory for sales and use tax collection
  3. The law provides safe harbor for sellers with limited business activity in South Dakota

Nexus Law

This new law is the Economic Nexus Law.  Consumers will see an increase in some tax rates and new taxes on other services that were not taxed in the past.  Nexus law is run by the U.S. Constitution.  This law makes doing business in other states very tricky with several tax hoops to stay compliant tax wise.  Basically “nexus” means having a tie to a state by a certain amount of transactions or sales in that state.  Also if you are doing business there like having an office etc.  

How your business has to collect sales tax boils down to where you are and where your buyer is located.  Also you will need to know if you have established a nexus in states in which you sell your goods in, or warehouse your items. 

For example, Kentucky a “destination” state meaning they collect sales tax  where the items are going to; however, they do have Nexus law in effect. If you do not live in Kentucky but sell items to customers or house items in Kentucky, then you will have established a nexus there.  Meaning you will need to follow your home state’s applicable sales tax rates and charge the sales tax rate in Kentucky if you house items there or sell to a customer there, because they are a nexus state.  

What This Means to You

With more states adding the economic Nexus law in light of wayfair  decision, online retailers will be forced keep up with and remain compliant by reporting and collecting sales. 

Learn why you need a CPA to help you with ever changing sales tax.

Industries like agriculture, manufacturing and industrial type businesses will have some exemptions.  Wholesale items apply, raw materials like wood for assembly, processing or refinement will have them.  The good news is food, medicine, and medical devices may be exempt also or at least in some states taxed at a lower rate.  All other items are subject to sales tax and the nexus sales tax law depending on a state’s current law.  Having the right tax guidance comes from an experienced certified public accountant who specializes in these areas.  

If you are looking for sound tax advice on any matter relating to taxes, including sales tax, reach out to a professional today.  Contact AKIF CPA and schedule an appointment. We help many businesses throughout the United States and Canada.

Subscribe to Our Newsletters

Crypto Tax & Accounting Newsletter

*Email

Cross-Border Tax Newsletter

*Email
Get Blogs Like This
in Your Inbox
*Email
Client Reviews
AKIF CPA
5.0
Based on 107 reviews
powered by Google
Annie Phillips
Annie Phillips
12:35 10 Oct 21
Turn around time was amazing on the project I needed done. When you don’t understand all the different forms... communication is key and you will get that here. They are there to explain what and why you need it.read more
Meru Kapadia
Meru Kapadia
23:33 01 Oct 21
I usually don't write reviews much as everyone has different experiences, but definitely wanted to share the positive... experience I have had here and why I would recommend them to all my family, friends and co-workers.I got a referral for here from a friend, so thought of giving them a try over my old CPA firm. I have been going here for a couple years now and have to say they are top notch. They are always responsive and willing to work with me even when I am delayed. I generally like to ask a lot of questions and not once did I feel like they were annoyed by it and would very thoroughly and positively answer all my concerns with detail explanations. Even during the pandemic, they worked with me 100% virtual and it was seamless. Overall, I am very happy with this firm and will continue with them for the foreseeable future.read more
Kevan Shah
Kevan Shah
21:45 01 Oct 21
I’ve been going to them for 3 years now for multiple of my businesses. I changed to them after I had problems with my... previous CPA firm and I’m so glad I did! Best decision I ever made for my businesses. They have saved me thousands of dollars over the years as well as deal with my immensely complicated tax filling issues. No matter when I call, they always help answer all my questions (and trust me I have a lot) and put my mind at ease on all my concerns. I feel as if I am family the way they take care of me. The quality of their work has not changed; very consistent and professional. It is an understatement when I say I highly recommend them.read more
Maunil Shah
Maunil Shah
16:19 01 Oct 21
AKIF CPA is the best place for your tax needs! Saim has been easily available for my all my questions and concerns. ... Couldn’t ask for a better firm that provides excellent service and a familiarity with their clients. I always recommend family and friends to AKIF CPA!!read more
Shah Hussain
Shah Hussain
03:58 01 Oct 21
Hello AKIF CPA,I wanted to share my experience with you, your team and whomever may be reading this message. My most... humble thanks to you and your team for a being such great part of my success.You have done a fabulous job for us this year, and since you took over our books (during our most devastating times) you have literally taken weight off of our shoulders.Thanks for bringing everything up to date and also providing us with numbers or as you call it consultations, ahead of time so we could seal the holes.Great work!!!Shah H.read more
Sumit Dalwadi
Sumit Dalwadi
04:57 30 Sep 21
The professionals at Akif have been absolutely amazing! Quick to answer all the questions I had and always available... to offer their guidance.read more
Calvin R
Calvin R
20:21 29 Sep 21
I recommend these guys! I will be going back next year. They made everything simple and we understood what was... happening. There we issues with our taxes due to our previous accountant and these guys fixed everything. They answered our questions and service was always with a smile.read more
Ammoria Daniels
Ammoria Daniels
02:11 16 Sep 21
We contacted Akif with an urgent matter regarding corporate taxes. Akif immediately understood what was needed and... within days had everything ready to sign. The level of service we received was amazing and unmatched. Waqar expertise in trucking industry made our situation seamless. His communication was outstanding; I heard from him daily and could have been completed sooner if I was as fast as he was 😃 Highly recommended!read more
Joe Paneitz
Joe Paneitz
18:30 18 Aug 21
What an absolute pleasure to work with this CPA firm. My business is already seeing such a positive impact and growth.... I cannot believe I didn't connect with them sooner. This firm is helping in so many ways! 5 stars is an understatement! Thank you so much for your help AKIF CPAread more
Helptest ARCpoint Labs
Helptest ARCpoint Labs
15:02 18 Aug 21
The firm is quick, responsive, and has the latest technological software. Thus far, I have been with them for 3+ years... and will continue to work with them even after relocating. They make it easy even when I'm miles away. Would highly recommend them.read more
Luz Tipaz
Luz Tipaz
16:06 13 Jul 21
Saim and his team are the best CPAs in town. I have been their client for years. All started when I needed help with... company structure with multiple companies and then accounting and Taxes. I have been very happy ever since. Thank you AKIF CPA.read more
Maria perez
Maria perez
18:31 08 Jun 21
Me and my husband have been getting all of our personal Taxes, business Taxes, monthly bookkeeping, accounting and... payroll done with AKIF CPA. Recently, we had more stuff come up and had detailed analysis done on capital gains, single family rentals (SFR) and business disposition. You will only know how great this CPA company is until you have worked with them and given them a chance. Words can’t describe our experience. AKIF CPA gets the job done every time - very reliable, professional and affordable.read more
Afnaan Amin
Afnaan Amin
22:14 02 Jun 21
Very good experience, we had unique situation in regards to cross border income as Canadians currently residing in the... US. Income on both sides of the border through completely different channels. Everything was very easy and completed timely, I also had lots of random questions and Mohammad provided top notch service along the way and even after we finished our taxes!! Highly recommended.read more
Ryan Paton
Ryan Paton
10:56 08 May 21
I moved to the USA from Canada late 2018 as part of a promotion/relocation for work. For my 2019 returns, I used an... accounting firm recommended by the local Canadian social club in my city, which was a terrible experience. They were slow to respond to inquiries and would follow up in piecemeal requests which dragged out my return process over several months, often asking for information I had already provided.For the price I paid, I vowed to find better service. I found Mohammad online and decided to reach out. Mohammad was extremely responsive, took care of my US and Canadian returns as well as my wife's business returns in a timely manner. Overall, it was a very positive experience and I would recommend him to another in my situation.read more
Tuan Vo
Tuan Vo
01:59 20 Apr 21
I relocated to Texas from Alberta, Canada and needed a CPA to help me with my cross-border taxes as I was not happy... with the CPA that I used previously. During my interviewing process to find another CPA, I had good feedback from Mohammad as he was able to answer my questions regarding my unique tax situation with expertise, and importantly to me, in a timely manner. I decided to use his services for the current tax year and I have nothing but compliments for the work Mohammad provided. If you are in need of a professional cross-border CPA, I highly recommend reaching out to Mohammad Akif.read more
See All Reviews
js_loader
*Email