August 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.

Nuts and bolts

Sales tax differences, eh? Any U.S. business that has started selling to its northern neighbor knows that it’s not all poutine and maple candies — that’s to say, it can be complicated. From factoring in Canada’s national sales tax rates to complying with the United States-Mexico-Canada Agreement to calculating different tax rates by province, there’s a lot to consider before you can start collecting loonies and toonies from Canadian customers. Learn more.

Returning to the office and bringing your nexus with you. As more employers are mandating the end to remote work and calling their employees back to the office, states are reevaluating the ties establishing physical nexus. But when can you deregister your business in a state and stop collecting and remitting sales tax there? Learn more.

Can you hear me now? A bill introduced in both houses of Congress, the Net Neutrality and Broadband Justice Act, would reestablish FCC control over broadband infrastructure across the United States. Revenue from this could help extend broadband internet access to high-cost areas. Zoom happy hour, anyone? Learn more.

Call me from the Show-Me State. As of July 26, VoIP services in Winchester, Missouri can be taxed just like local telecommunications services. This court decision could open the door to similar changes in the way new and existing communications technologies are taxed.

This is a big deal. Avalara was just named a 2022 SAP Pinnacle Award winner. These awards “recognize top-performing partners who have excelled in helping customers become best-run businesses,” and winners were picked based on a commitment to customer value creation, exponential growth, and simplification. Read the announcement here.

At the store

Anything but restful for retail workers. Sales tax holidays are popular with consumers — who wouldn’t be excited to save on back-to-school supplies or baby clothing? But every time a new tax holiday is announced, we can almost hear cashiers across America groan. To complicate matters, new sales tax holidays can overlap with others, or exemptions can vary by jurisdiction. Learn more.

Baby’s first tax exemption. Starting September 1, 2022, children’s diapers will be exempt from Indiana sales and use tax. New York is expanding its exemptions later this year. Learn which other states are considering exemptions for little ones.

So long, pink tax! Not to be outdone by Indiana and New York, the states of Colorado and Iowa are exempting diapers and feminine hygiene essentials from sales and use tax. Learn more about these exemptions.

At the tap

Your favorite IPA, delivered. Just a handful of states (fewer than a 12-pack) permit direct-to-consumer shipping from breweries. Find out if your state is one of them, and what restrictions (if any) are standing between you and having your favorite brewery “on tap.”

Pacific Northwest brewery schism. Is Oregon’s DTC beer shipping policy unconstitutional? Three Washington brewers are claiming that it is. As it stands, if you’re a brewer outside of Oregon, you can ship malt beverages DTC into the Beaver State only if you're licensed in a state that permits Oregon licensees to make DTC malt beverage shipments. Learn more.

At the pump

Keeping it local. How many layers of taxes do you pay at the pump? You may be paying at the federal, state, county, city, and special jurisdiction levels, thanks to local option fuel taxes. Find out if you're paying more for fill-ups (especially if you’re in the Sunshine State).  

It’s a bird! It’s a plane! It’s new Superfund taxes! As of July 1, 2022, energy companies might find themselves paying a little more to help the EPA clean up around 44,000 hazardous waste sites. Learn about new Superfund taxes.

Business to business

Takin’ care of business-to-business. Two-thirds of corporate buyers rely on digital channels to make purchases for their businesses. If you’re going to make it as a seller in the cut-throat world of office supplies, manufacturing equipment, and other business essentials, you’ll need to adapt to the future of business payment methods. Learn all about B2B payments in this 3-part series that covers everything from an overview of B2B payment solutions to accepting online payments to ecommerce payment processing.

Selling on the World Wide Web. Is your business transitioning from a brick-and-mortar-only approach to an omnichannel sales strategy? Here are seven steps to help you quickly establish an ecommerce presence and reach customers.

You might need a retail ERP if … Are you selling through multiple channels? Is your inbox filling up with customers chasing down their order information? Find out if a retail ERP can help you streamline inventory management, fulfillment and shipping, returns, and more.

Let’s get physical … presence nexus. If you’re selling through a marketplace like Amazon or Etsy, you may have tax obligations you’re not aware of. Marketplace sellers often have inventory stored in warehouses or fulfillment centers, and having inventory in a state is one of the ways you qualify for economic nexus. Of course, it all varies by state — learn more here

Goods and services!? Personal, professional, and business services are often taxed, just like the sale of goods, but as per usual, the rates at which they’re taxed and what qualifies for sales tax varies by state. See if your combination dog grooming-resume writing-landscaping business is obligated to register for and remit sales tax.

Your ecommerce business shopping list. There’s a lot to consider when it comes to running a successful ecommerce store. Here are the costs you should factor in before launching what will inevitably be our favorite online holiday shopping destination.

“Accounting” for sales tax. We love sales tax, but even we admit that it can be complicated, especially if you’re a small accounting practice. Automating and/or outsourcing tax compliance services can help accounting practices of all sizes better serve their clients who are in need of sales tax help. Learn more about Avalara for Accountants, and don’t be surprised if your clients give you a superhero cape with a calculator on it.

Not exempt from paperwork. Even if you only sell products and services that are exempt from sales tax, you may still have to register and file returns in the states where you do business. Of course, sales tax obligations depend on what you sell, who your customers are, what they’re using your product or service for, and where the sale occurs, so brush up on your exemption tax knowledge here.

Check out the Avalara resource center for more helpful information.

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