The five steps for managing sales tax

Step 1: Know where your business must collect and remit sales tax

1. Introduction
2. Step-1
3. Step-2
4. Step-3
5. Step-4
6. Step-5
7. Conclusion

Overview

You may not need to collect and remit sales tax everywhere, so determining where your business has nexus is the first step. Many business activities create a nexus obligation with a jurisdiction, including having physical locations, remote employees, affiliate relationships, or economic activity in that tax jurisdiction.

What to do:

First, understand the different business activities, then review your activities to determine where you may have an obligation. Nexus laws can change frequently, so stay informed of changes in legislation that may affect state and local tax jurisdictions. Avalara has many resources to help you understand the concept of nexus and stay up to date with nexus-related rules and policies. 

Nexus resource hub

The nexus resource hub on avalara.com provides insight into the ins and outs of sales tax nexus.

Sales tax laws by state

Our sales tax laws guide provides detailed information on what activities trigger nexus in each state. From here, you can access more information on specific sales tax laws in greater state-by-state detail.

Let Avalara help:

If you’re unsure about your current or expanding sales tax obligations, an Avalara nexus study can help. We offer an in-depth nexus study and ongoing nexus monitoring to help you decipher where you have an obligation to ensure you’re ready for Step 2.

Next steps

The five steps for managing sales tax

UNCOVER ECONOMIC NEXUS

Use our free Sales Tax Risk Assessment tool to get a breakdown of states where you might be obligated to collect sales tax. Economic thresholds vary from state to state so review your activity against sales and transaction thresholds often to ensure you’re ready to register, collect, and remit when you need to.

Existing Avalara AvaTax customer? Sign in to your account today to find your risk assessment prepopulated with your sales that flow through AvaTax.

REMEMBER THE FIVE STEPS

Keep this checklist handy to remember these critical steps