After the ruling on South Dakota vs. Wayfair, the big question on seller’s minds is…
Where am I on the hook to collect and remit sales tax?
Sales and use tax compliance begins with an accurate understanding of your company’s nexus footprint. If you have nexus, you have to follow the rules, which means registering for a sales and use tax license or permit, collecting tax on your taxable sales, securing appropriate documentation from your customers for tax-exempt sales, and filing tax returns and remitting all taxes due.
Determining nexus can be tricky. An in-state physical location creates nexus, such as a company office, retail store, warehouse, or similar permanent place of business. Often nexus extends to lesser-known in-state activities, including employee home offices, 1099 employees, trade show attendance, inventory temporarily stored at a third-party location (think Amazon fulfillment centers), demo property loaned to customers for evaluation, and rental property.
Most companies don’t have sales tax experts on staff who know this nexus stuff by heart. But we do.
Avalara’s Nexus Analysis Service consists of a team of seasoned tax professionals who will:
- Conduct a detailed survey on your company’s business activities
- Evaluate these activities against current, state-specific nexus rules and guidelines
- Identify those states where your company has created nexus
- Provide state-specific options to become sales tax compliant
You’ll come away with a nexus report customized to your business and its specific activities in each state, along with a state-specific analysis of these activities compared to the current nexus rules and policies of each state. We’ll also provide a history of nexus and how the rules have evolved over the past several years, current developments (including click-through and economic nexus), and recommendations on the path forward to compliance.