May 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

Mergers and acquisitions and licensing challenges. If staying on top of business licenses for a single business presents a challenge, imagine how much more difficult it is when you have to factor in mergers and acquisitions. Understanding what you’re up against is the first step.  

Springtime (license) renewal. In some states, your business license is valid for as long as you own your business. In others, you have to renew every year. As of November 2020, Alabama is in the second category. Business owners will have to make annual trips to the Alabama Department of Revenue website to renew their lodging tax, rental tax, sales tax, or sellers use tax licenses

Think pink (tax). Have you ever found yourself in the fluorescent-lit aisles of a drugstore, wondering why a purple, shimmery lilac-whisper-scented deodorant is more expensive than a steely gray tube that smells like evergreen sport? That’s the pink tax in action. While not a traditional tax, the pink tax refers to the fact that some products and services designed for women or girls may cost more than similar products and services designed for men or boys.

Retail delivery relief. Since it took effect July 2022, the Colorado retail delivery fee has been a hot-button issue for businesses in the Centennial State. A new Colorado bill, signed into law May 4, 2023, aims to take the heat off small businesses by waiving the fee for qualifying new businesses and businesses with less than $500,000 in sales during the previous year.

Home sweet home-based businesses. Are you starting a home-based business? From sales to sweets, each type of business has different registration requirements when it comes to the state or tax jurisdiction they operate in. How do you know if you even need to register with your state’s secretary of state

Order up! A great restaurant requires a talented team of people to run smoothly — friendly front-of-house staff, skilled chefs, and someone in the back office making sure everyone gets paid on time. But do you need to add tax expertise to the menu

Automation nation. Taxes can be complex, time-consuming, and a ton of work for your employees. Market intelligence firm IDC finds organizations that automate can scale and grow their business faster, increase the speed of response to the customer, and be more agile in their response. What could you gain by automating tax compliance

Sold! To the reader of this blog post. If you’re looking for a limited edition baseball card or running a business selling your collection of vintage video games, chances are you’ll find yourself on eBay. But what are your responsibilities when it comes to collecting and remitting sales tax on one of the biggest online marketplaces? We have your answers (no bidding required).

What’s use tax got to do with it? You’ve likely heard the phrase “sales and use tax,” and if you’ve stuck around the Avalara Tax Desk for any length of time, you’re on your way to becoming a sales tax expert. But understanding use tax can be a little more complicated. Here’s what you need to know.

Invoicing goes digital. If you do business internationally, you may have noticed increased use of electronic invoicing across parts of Europe. Learn how Avalara E-Invoicing and Live Reporting can help you keep up with global e-invoicing mandates.  

From the property tax desk

Fueling your property tax curiosity. So you’ve struck oil on your property (or you’re an owner of an oil and gas property). Before you and your family take your newfound wealth to sunny California for hilarity and hijinks, you might have some property tax questions. We have answers.

Like a balloon animal at a kid’s birthday, there’s no avoiding inflation. You may have noticed higher prices at grocery stores, but did you know inflation can also impact how much you pay in property taxes? Learn how inflation impacts business personal property tax valuations, and how Avalara can help.

From the other end of the line

Are you still watching? In November 2022, Netflix launched an ad-supported plan to subscribers in 12 countries. Just as tech companies seem to change a user interface as soon as you get the hang of it, these changes might present difficulties to states trying to make up for lost communications tax revenue — right after a number of them enacted “Netflix taxes” on digital streaming services. 

Communications complications. Whether you hold meetings via video call, subscribe to automated reminder texts, or take a workout class from the screen on your stationary bike, you’re likely using communications services and tools all the time. But the taxes that apply to those services can be complex and hard to understand. We break down what communication service tax is and help you determine if your business is on the hook for it.

Sales tax holidays and exemptions

It’s a jolly sales tax holiday. As the summer season rolls around, so do holidays — including sales tax holidays. Learn which states are offering sales tax breaks on back-to-school supplies, children’s diapers and clothes, or Energy Star appliances. 

Don’t mess with taxes. Some states know the best way to kick off a holiday weekend is with a sales tax holiday — Texas is one of them. Learn more about sales tax holidays and tax-free weekends in the Lone Star State

Back-to-school sales tax holidays. One popular tax-free-weekend theme is clothes and supplies for kids going back to school in the fall. Learn about upcoming summer sales tax holidays and make sure you mark your calendar for the ones in states where you do business. 

Exemption exception. Here’s a wacky tax riddle for you: When is a retailer a construction contractor? When the retailer realizes it’s advantageous for tax reasons in the state of Illinois, of course. Learn more about tricky sales tax laws in the Prairie State, and how some companies are managing the “very heavy burden” of proving tax exemption. 

Florida gets tax exemptions. From baby supplies to dental floss, Floridians could save a lot on sales tax this year. On May 26, 2023, Governor Ron DeSantis signed HB 7063 into law, giving the Sunshine State seven new sales tax holidays and a number of permanent sales tax exemptions. Learn more.

 

Check out the Avalara resource center for more helpful information.

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