June 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

Land of 10,000 Lakes ... and one new delivery fee. Effective July 1, 2024, the state of Minnesota is imposing a 50-cent fee on retail deliveries of orders totaling $100 or more. The fee might be a little confusing because it applies to clothing, which is generally exempt from Minnesota sales tax, but not to diapers, which are also exempt. Learn more with this handy blog post (FAQ included). 
 
Sales tax on software. Video games delivered electronically, computer software, and computer software services are subject to Mississippi sales tax as of July 1, 2023. 
 
Mark your calendars. Baby clothes, back-to-school supplies, gas cooktops — if you sell it, there’s likely a sales tax holiday coming up for it.. Read up on the latest in sales tax consumer savings and get ready for upcoming tax-free events in your state

Thank you, nexus. For about five years now, many states have included a transaction threshold as a way to establish economic nexus. But some states — like Louisiana and South Dakota — are dropping the economic nexus transaction threshold. Is this a trend other states may follow

Small business, big licensing questions. One of the first things to do as a new small business owner is pick a cool name (preferably a play on words) and maybe a logo with a cute dog on it. The other thing you must do is register your business to collect and remit taxes in all your local jurisdictions. Here’s everything you need to know about the latter.  
 
Where there’s a will, there’s a Wayfair decision. Picture it — 2018. Ed Sheeran was playing on radios everywhere, Royal Wedding fever hit the U.K., and the United States Supreme Court made a ruling that would change the world of online sales tax. Where are we five years later?   
 
The cost of savings. Many states offer sales tax holidays — occasions when certain products like Energy Star appliances or school supplies are exempt from sales tax. But what does that mean for the retailers that sell those items? And what happens when states offer overlapping sales tax holidays?   
 
Baby’s first sales tax exemption. Speaking of sales tax savings, North Dakota is joining the growing list of states with no sales tax on diapers for children. Read more about how the Peace Garden State is making an effort to support families with this tax exemption, and which other states exempt diapers from sales tax.  
   
Red, white, and blue sales tax changes. July means fireworks, hot dogs, and sales tax changes. Find out which tax rate changes take effect July 1, and catch up on the latest in exemption news.  
 
Rest easy. Is sales tax based on shipping address or billing address? Can I look up sales tax rates by ZIP code? Do I have to collect sales tax? If these types of questions keep you up at night, we can help. This blog post answers those questions and more
   
Easier exemptions. Managing exemption certificates can be a challenge for any business. From collecting the right documentation to understanding rules across jurisdictions to creating an effective system to store certificates, here’s how to solve the most common exemption certificate challenges.  
 
Hoosier déjà vu. Indiana changed several sales tax requirements for nonprofit organizations back in 2022. They’re revisiting some of those changes with Senate Enrolled Act 417, with new rules taking effect July 1, 2023. Read the FAQ here.  

I don’t think this delivery is taxed in Kansas anymore, Toto. As of July 1, 2023, delivery charges that are separately stated on an invoice are not subject to Kansas sales tax. Prior to this change, delivery charges were considered part of the sales price. Read up on what this change means for businesses in the Sunflower State. 

Lower food tax in Alabama. Alabama is one of three states that subject groceries to the state’s full tax rate. But starting September 1, 2023, the state is lowering the tax on groceries to 3%

Invoicing goes electronic. While not mandatory in the U.S., electronic invoicing requirements are spreading all over the world. Learn more about what e-invoicing is, and why it might be beneficial to your business
 

From the tap

The fate of cocktail-to-go laws. When restaurants had to close their doors to in-person diners, many of them added to-go cocktails to their menus. But now that restrictions have lifted, states are deciding whether to extend their alcohol to-go policies or let them expire.

From the property tax desk

As Bob Dylan wrote, “the times they are a-changin’.” He likely wasn’t thinking about the changing times’ effect on your property taxes, but we are. Here’s what to do if your property tax rate changes because of inflation, depreciation, or other reasons.

The lowdown on deadlines. Maybe you mark the date on your paper calendar, set a reminder on your phone, and hire a carrier pigeon to alert you of property tax due dates. Here are some better, non-avian ways to manage property tax return deadlines.

Property tax tips. It’s notoriously difficult to budget for annual property tax bills. But what if you could maximize ROI with your business property tax appeals? Now you can with these four tips from Avalara experts.  

Location, location, location. Property tax compliance can be tricky, particularly if you own property or businesses in multiple states or jurisdictions. This handy state-by-state guide can help you determine if and when you might owe.  
 

 
Check out the Avalara resource center for more helpful information.

 

This post was updated September 19, 2023.

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