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Sales Tax Secrets: The Multi-State Tax Tango

It’s hard to come up with a completely comprehensive list of sales tax pitfalls that apply to retailers that sell in multiple states. The things that will trip you up in California may not raise an eyebrow in Minnesota, and trying to keep up with it all can feel like trying a complex dance without knowing the steps. What makes multi-state sales tax such a hard song and dance?

One of the main reasons for the complexity is that the application of sales tax law changes over time, and this happens differently in each state. Thus, while each state provides the laws for sales and use tax, plenty of amendments, court cases, and clarifications exist to throw you off beat. As retailers, you do your best to follow the law as you see it and defend yourself in an audit. As auditors, you do your best to carry out the laws as you see them, and often times that doesn’t jive with the retailers’ perspective. Sometimes all of this this may be out of sync with a document released by the state more recently that gives greater detail to the law.

If you're interested in specific examples, you can check out recent sales tax changes in Michigan or New York.

You don’t have to be a lawyer to understand the problem or its complexity. This isn’t the hokey pokey, it’s an obscure tango your great uncle taught you after seeing it in a film. Sometimes the best course of action is simply to hire the right people to lead you in the dance. After all, wouldn't you rather spend your time learning the Money-Making Mambo over the Multi-State Tax Tango?

photo credit: romanlily via photopin cc

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Christina Lengyel
Avalara Author Christina Lengyel
Christina Lengyel is a writer by trade and has found herself in taxes by way of research. As an analyst, she has tracked down thousands of products by UPC in order to determine when and where they are taxed.