Did holiday sales put you over the top?
Learn if you have new sales tax obligations due to a successful holiday shopping season.
A changing landscape
Read our 2020 sales tax changes report to understand how economic nexus laws dominated the sales tax landscape in 2019. One common misconception surrounding economic nexus laws is that they only apply to the current calendar year. That isn’t the case. Many states include sales activity for the previous 12 months or calendar year. For businesses that make most sales in the last few months of the calendar year, getting this wrong can be costly. Read on to get tips to determine if the 2019 holiday shopping season triggered additional tax implications for your business.
Understanding economic nexus
Economic nexus is a tax collection obligation imposed on companies based solely on a certain level of economic activity within a state. Unlike nexus that’s based on physical presence, economic nexus is based entirely on sales revenue, transaction volume, or a combination of both. Like many sales tax laws, economic nexus criteria vary by state and can be confusing. Review our state-by-state guide to economic nexus laws for specific information on every state with an economic nexus law.
Evaluate your sales tax obligation after a busy holiday shopping season
If you’re a current Avalara AvaTax customer, try out the economic nexus tracker within AvaTax to see if you’re approaching or might have exceeded an economic nexus threshold. We’ll compare the sales activity that flowed through AvaTax against each state’s unique sales or transaction thresholds and evaluation periods to alert you if you have a new obligation.
Questions on this feature? View additional details in this center article.
Need to register to begin collecting and remitting sales tax?
If you have new sales tax obligations, the first step is to register in new tax jurisdictions.
Take these steps to maintain compliance
Prepare so you can manage sales tax obligations
Understand the ins and outs of economic nexus by state