January 2023 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

Bob the Builder — Can we tax it? Materials, labor, and the time it takes to decide on a grout color — these are the building blocks of a construction company’s budget. But how does tax factor into it? We hammer out the details in this blog post.

When sales tax goes on holiday. It seems like there are sales tax holidays for everything — back-to-school clothes and books, disaster-preparedness supplies, and even energy-efficient appliances. Find out if your state is putting sales tax on hold so your business can plan ahead.

Sit, shake, pay taxes? What do you do with Fido and Fluffy when you go on vacation? Whether you bring them along to a pet-friendly hotel or board them, the pet fees your furry friends incur may be subject to tax. Learn more about pet care taxes, including some surprising taxes in Connecticut.

Three cheers for tax changes! If you haven’t read Avalara Tax Changes 2023 yet, what are you waiting for? Our seventh annual tax changes report is chock-full of industry changes, legislative trends, and the updates you need to be successful in the coming year — and it’s live now!

Consider us your nexus bestie. A lot can go into determining your sales tax obligations, like where you have offices and inventory, where your customers are located, and even where your advertisers are based. Find out what you need to know about nexus, especially if you’re a small business.

Happy trails to you! Moving is tough. Without fail, something gets left behind at the old place, like the welcome mat or a drawer full of ketchup packets. But have you ever left your tax obligations behind? Some states require a business to maintain its sales tax permit even after the business no longer meets the requirements for sales tax nexus with the state — that’s called trailing nexus.

Don’t fumble your lodging taxes. It’s almost that time of year when football fans make their annual pilgrimage to whichever state is hosting the Super Bowl (this year it’s in Arizona). If you rent a house, spare room, or couch to one of these traveling football fans, your short-term rental will be subject to Arizona tax. Kick off your Super Bowl prep with this play-by-play of short-term rental tax in the Grand Canyon State. 

License to tax. Every state with sales tax requires businesses to register for a sales tax permit before they can start collecting and remitting tax in that state. Sometimes these permits are called retail licenses, seller permits, or vendor’s licenses, but whatever you call them, you need to understand how they work in your state and whether you need to get one before doing business.

Keeping consumers informed. In an effort to curb fraud, Congress passed the Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act (the INFORM Consumers Act) that will require online marketplaces to monitor high-volume marketplace sellers. Among other things, marketplaces will need to collect and verify certain information, disclose information to buyers, and comply with data privacy requirements. What will this mean for sellers on Amazon and eBay?

Shipping security. If your business ships internationally, you’ll want to be aware of Import Control System 2 (ICS2), the new EU safety and security initiative that screens shipments before they arrive in Europe. Take these steps to ensure your shipments go smoothly.

Forgetting something? What happens if you have sales tax nexus in a new state but don’t know it? With different nexus thresholds across jurisdictions and the many business activities that count toward those thresholds, it can be easy to forget about nexus. Here’s what to do next.

Registration nation. Every state with sales tax now has laws on the books to tax remote sales. Which means you might need to register to collect and remit sales tax in multiple places. Find out what you need to know to get started.

Welcome to our new robot overlords. From AI art to self-driving cars, it seems like automation is everywhere. But what if you could harness the power of automation to improve your sales tax compliance?

From the tap

On the rocks in rocky times. If the COVID-19 pandemic of the last few years had you reaching for a cold one (or reaching for an app to have a cold one delivered directly to you), you’re not alone. The direct-to-consumer (DTC) beverage alcohol industry has experienced a fair amount of growth since 2020, but do experts expect that to continue?

Speaking of DTC beverage alcohol sales, we put together a multistate direct sales guide for wineries. Learn which states permit out-of-state wineries to ship directly to consumers, why it might be a good idea to tap into the DTC market, and get a checklist for what you need to do before you can send merlot to Massachusetts or chardonnay to California.

From the accounting desk

Accounting from the couch. Aside from reducing your commute time and allowing for a better work-life balance, working from home has added benefits for accountants and accounting practices. Find out how WFH can benefit your accounting team, and what you need to do to set them up for success (even in sweatpants).

From the other end of the line

Hotline hot topic. Last year, the FCC required telecommunications providers to direct 988 calls, texts, and chats to the 988 Suicide and Crisis Lifeline, making this hotline service available through every landline, cellphone, and VoIP device in the U.S. While some states are funding the 988 hotline from their general budgets, others have passed the responsibility to telecom businesses.

From the register

Is it time to start planning for the 2023 holiday season? For many retailers, now is the perfect time to reflect on the last year and put plans in place for the year ahead. We commissioned Censuswide to conduct a survey of retailers across the United States, the United Kingdom, and India — discover what we learned.

Check out the Avalara resource center for more helpful information.

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