View
659
Download
5
Category
Preview:
DESCRIPTION
Learn the basics of sales tax collection and remittance no matter where you sell online from industry expert Mark Faggiano of TaxJar. This webinar will take the mystery out of a complex topic with serious financial implications for your business. Mark will cover when sellers must collect sales tax, how to determine how much sales tax to collect, and what changes if the current federal sales tax legislation passes. After "Sales Tax Bootcamp," you will be armed with the tools and resources to take charge of this complicated part of your business. Presenter Mark Faggiano, industry expert and Founder / CEO of TaxJar – a service built to make post-transaction sales tax compliance easier for multi-channel ecommerce sellers. Mark previously co-founded and led FileLater to become the web’s leading tax extension service for both businesses and individual taxpayers.
Citation preview
Housekeeping
• Webinar typically lasts 1 hour
• If you dialed in you will be muted for the duration of the presentation
• You can ask questions via the GoToWebinar question box
• There will be a Q&A at the end
Today’s Topics
• “General Rules” of sales tax
• It’s all about nexus!
• How much sales tax to collect
• Filing sales tax returns
• Marketplace Fairness Act
• Here to help and resources
• Special offer!
• Q&A
Quick Intro: Mark Faggiano
• I love solving complex problems for small business!
• Previous tax products:• FileLater • EasyEstimatedTaxes
• Founder of TaxJar
• Not a CPA or tax professional
• Here to share my knowledge
“General Rules” of Sales Tax
• 45 states + 45 sets of laws = too many rules!
• Sellers are ‘collection agents’
• Sell to someone in your state = collect and remit sales tax
• Sell to someone out-of-state = no sales tax….yet
• How much you collect depends on a lot!
“General Rules” of Sales Tax
• Filing deadlines usually tied to sales volume
• Some states have discounts for early payment
• All states have penalties for late payment
• Save everything in case of audit
Everyone’s Multi-Channel
• Selling items on more than one platform
• Some platforms help you collect sales tax
• None help you file or pay
• Sales tax is being collected in different accounts
• Once you collect, you’re on your own!
Nexus: When to Collect
• Your business has a presence in a state significant enough that you’re required to comply with state sales tax law
• Register your business
• Collect sales tax on orders shippedto that state
• Pay what’s been collected
Nexus: When to Collect
• Nexus for one channel means nexus for your entire business• Ex – FBA nexus gives your eBay
business nexus
• No nexus in a state means youdon’t have to collect
Common Nexus Types
Home or Office Inventory
• Where you live and/or operate your business
• Live in San Jose and sell out of your house
• Comply/collect in CA
• Inventory is in a 3rd party warehouse
• Live in San Jose with inventory in PA
• Comply/collect inCA & PA
Dropshipping doesn’t apply to either scenario
3rd Party Fulfillment & Nexus
• Inventory is becoming nexus• MN on April 1
• Register with each FBA state
• Collect sales tax
• Pay what you collect
• Remit sales tax returns
FBA’s Impact on Nexus
Every ‘FBA state’ says your inventory counts as nexus
• Register with each FBA state
• Collect sales tax
• Pay what you collect
• Remit sales tax returns
Example
• Example: Joe Seller is based in Akron, OH
• Joe uses a 3rd party fulfillment provider• Inventory stored in NV
• He’s complying in 2 states:• OH• NV
How Much Do I Collect?
• Tax rate usually = state + local + special
• Origin-based state• Tax rate = seller’s location• One rate for entire state
• Destination-based state• Tax rate = where item is shipped• Variable rate
• California
Origin: Sale in Ohio
AKRON SHAKER HEIGHTS
Rate collected: 6.75%
• State: 5.75%
• Summit County: 1.00%
Destination: Sale in New York
STAMFORD BUFFALO
Rate collected: 8.75%
• State: 4.00%
• Erie County: 4.75%
California: We’re Special!
• Technically, neither Origin or Destination
• Sales tax rate = state + district tax(es)
• District tax only collected on sales in a district in which you are “engaged in business”• (Pub 44, Page 5)
• Sellers are able to charge 2 different rates• Customers in your district• Customers outside your district
• Pub 177
CA: Same District Sale
SAN DIEGO CLAIREMONT
Rate collected: 8.00%
• State: 7.50%
• San Diego County: 0.50%
CA: Out-of-District Sale
SANTA CLARA ALAMEDA
Rate collected: 7.50 %
Buyer responsible for local use tax OR Seller collects based on destination
How to Collect on Amazon
• It’s up to the seller to correctly setup collection on Seller Central
• Amazon will NOT tell sellers howto collect in FBA states
• Example of collecting ‘wrong’• Collecting only state rate in
destination-based state
How to Collect on Amazon
FBASalesTax.com
• FREE ebook that includes the settings for every FBA state
How to Collect on eBay
• Able to collect only one rate
• Collect at state rate for everyone• Pay out-of-pocket for in-district sales• Competitive advantage?
• Collect at highest rate for everyone• Pay whatever you collect!• Nothing out-of-pocket
Filing Returns
• Combine and file a single return per state• Not separate returns per channel
• Filing on time can equal a discount• blog.taxjar.com/state-sales-tax-discount
s/
• File zero returns!• When you’ve collected $0 in sales tax
Filing in Destination States
• Huge pain!
• You have to tell the states how to divide up the money
• Calculate taxable sales and sales tax collected by jurisdiction
• Gets worse if you’re multi-channel
Status
• Federal legislation
• Passed quickly in Senate in Spring 2013
• Currently stalled in The House
• Will it be added to ‘larger’ bill?
If Legislation Passed Today…
• $1 million remote sale exemption
• Current nexus relationships will remain
• Remote sales = compliance even without traditional nexus
• If you’re under $1MM in remote sales, you still need to comply with nexus states
Existing Nexus Example
• Seller is based in WA
• Annual remote sales = $1.5MM• $900k to NV• $600k to CA
• Seller registers in NV; remote sales = $600k
• Seller now under the $1MM exemption
TaxJar: Here to Help
• Automatically pulls and organizes sales and tax data from your seller account(s)
• Creates daily reports subtotaled by local jurisdiction (county, city, etc)
• Estimates what you SHOULD have collected
• Pro channel for accountants
Actual vs Estimated
• Not sure if you’ve set up your sales tax collection correctly
• Can only enter a single rate per state
• You’ve collected sales tax on only some of your orders
TaxJar: Here to Help
• TaxJar.com
• 30-day free trial (no credit card required)
• Monthly or annual subscriptions
• Pricing based on transaction volume• Starts at $9.95/month for 1k transactions
TaxJar: Special Offer
Get an extra 1 month for FREE
1. Signup for TaxJar and email mark@taxjar.com• Extra 15 days FREE
2. Two Options for another 15 days FREE
• TWEET: I just signed up for @TaxJar• Like TaxJar on Facebook
Resources
SalesTaxCommunity.com
Talk with other online sellers!
blog.taxjar.com
Content just for ecommerce sellers
FBASalesTax.com
Free Guide: “Amazon Sales Tax
Quick Reference Guide”
Recommended