February 2022 Roundup: Tax laws you need to know

While you focus on your business, we stay on top of legislative and policy changes that can affect your tax compliance.

Should online sellers be required to accept cash payments? Can you use ZIP codes to determine tax rates? This month’s roundup covers these topics and more. Read on for more details.

Nuts and bolts

Cash, please.

Online shopping is supposed to be the very essence of convenience, but it can be challenging for the millions of Americans who don’t have a bank account or access to credit. To help level that playing field, some states want retailers — even online sellers — to accept cash payments. Learn more.

Change happens.

A new local reporting requirement in upstate New York starting March 1, 2022, is just one change affecting sales and use tax compliance. Learn more.

(Don’t) zip it.

ZIP code and tax boundaries sometimes line up, but often don’t. And that’s OK, because the purpose of ZIP codes is to streamline mail delivery, not sales tax compliance. Learn more.

Drop it.

Drop shipping can be a win for all parties, but because drop shipments typically involve one customer, two businesses, two sales transactions, and often two or three states, they can make sales tax compliance a bear. Learn more.

More time.

Colorado’s slow transition to destination sourcing started in 2019, not long after the state began taxing remote sales. Destination sourcing was supposed to fully take effect February 1, 2022, but was pushed back to October 1, 2022. Learn more.

Put the tax where it belongs.

Among the unsung jobs of a retailer is collecting sales tax on behalf of state and sometimes local governments. Another responsibility is making sure the collected tax ends up where it belongs, when it needs to be there. Learn more.

Ship it.

Just as there’s no one way for an ecommerce business to get products into the hands of customers, there’s no one way to tax shipping and delivery charges. Learn more.

Stay home.

Working from home has both advantages and disadvantages, as many of us now know. For home-based businesses, one challenge is determining whether it’s necessary to register with the Secretary of State. Learn more.

 

From the tap

Healthy competition.

Direct shippers could benefit from a new report on competition in the beer, wine, and spirits markets. Learn more.

Help us understand.

Though many wineries rely on fulfillment houses to store, package, and ship wine, fulfillment houses remain widely misunderstood. As a result, they risk being banned. Learn more.

 

From the wire

Florida man streams music, pays tax.

Florida made headlines in 2021 after it applied its Communications Services Tax (CST) to music streaming services. The Sunshine State was an outlier then — but it may not be for long. Learn more.

 

Taxing online sales

Don’t overlook the past.

Even a small change to sales and use tax laws can have a big impact on sales and use tax compliance — like when a state retroactively enforces a former economic nexus threshold. Learn more.

Keep your head on.

Industry experts expect B2B ecommerce and headless commerce to gain more ground in the coming months and years. Learn more.

Pile it on.

On top of the rise in railroad theft and increased pressure to prevent the sale of stolen goods, marketplaces face new tax requirements. Learn more.

Swipe right.

Though few, if any, states have adopted a specific tax on dating apps, most states do tax online dating transactions. Learn more.

 

Up in smoke

Vape taxes on the rise.

There’s still no federal excise tax on vaping products, but state and even local taxes on vaping products are becoming increasingly common. At last count, 12 additional states were looking to tax vaping products or e-cigarettes. Learn more.

Check out the Avalara resource center for more helpful information.

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