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The CRUSH Files: Sales Tax Nexus and Meeting Compliance Requirements

  • Apr 10, 2017 | Andrew Johnson

Your company may have nexus issues without ever realizing the long-term implications of meeting state compliance requirements. Here to help you understand this topic is Andy Johnson, CPA and cofounder of Peisner Johnson & Company, LLP, a firm that focuses exclusively on solving client sales tax problems. Andy is one of this year’s conference speakers at CRUSH AUSTIN 2017, Avalara’s national tax compliance conference May 2–3 in Austin, Texas. We sat down with Andy to find out more about his topic, what attendees will learn, and what he is most looking forward to at this year’s conference.

Accounting professionals and business owners are attending CRUSH 2017; why would they need to know more about nexus to better serve their customers or get their job done?

I want CRUSH attendees to be better poised to assess the potential compliance issues related to sales tax nexus, and create a plan for handling those issues. The sooner they assess their risk, the better, so they or an accountant’s clients don't face mounting exposure. The good news for some companies is there might not be any real problems at this moment.

The title for your session at CRUSH AUSTIN is “Sales Tax Nexus: FBA and Other Drop Shipping Questions.” Tell us what you’re covering in this session.

It’s actually pretty easy for Fulfillment by Amazon (FBA) and other online sellers to have nexus, so I hope sellers can settle that in their mind and move on to what I think is the bigger issue: what to do about the nexus problem. The answer depends on the materiality of the exposure and, in turn, which state(s) we're talking about. The next point is to create a plan so that sales tax issues can be dealt with; the plan isn’t difficult to do, and it will be such a relief to online sellers. The other part of the presentation has to do with drop shipping issues that may be important to some attendees. This is a complex area of sales tax, but we can make it relatively easy to understand and give participants some good strategies for avoiding the biggest pitfalls.

Why do you feel businesses ignore, or are unaware of, sales tax nexus, and what potential ramifications do the businesses face?

Nexus is an unknown exposure that most sellers would like to avoid. Some are hearing only what they want to hear: That Congress is somehow going to step in and remove the obligations … so I chalk it up to “blissful ignorance.”

What is one of the points from your session you think is the most impactful?

I think it’s that nexus isn't that difficult to deal with, but exposure grows exponentially over time, so it's better to do something now than later.

How do you feel technology helps speed sales tax compliance and reporting?

It's a lifesaver, and for some sellers, there wouldn't be any other practical way to handle compliance and reporting.

What are you looking forward to most at CRUSH AUSTIN?

Interacting with Avalara customers and employees, and providing a message that gives some hope and encouragement to sellers facing unknown sales tax exposure.

Join Andy Johnson for his session, “Sales Tax Nexus: FBA and Other Drop Shipping Strategies,” on May 2. For more information on CRUSH AUSTIN 2017, visit our website that includes all conference sessions, speaker bios, location information, after-hours activities, and more!

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
Andrew Johnson
Avalara Author Andrew Johnson
Andy graduated with a master’s degree in accounting with emphasis in taxation from Brigham Young University. He began his career in state taxation with Arthur Anderson, then after four years he partnered with Jerry Peisner and in 1992 founded Peisner Johnson & Company, LLP. Andy is an experienced professional in state and local tax matters and has consulted hundreds of companies in virtually every industry across the country. He is also a member of the AICPA and the Texas Society of CPAs.