14
Dec

More Carts, More Problems: Sales Tax Tips for Multichannel Sellers

From TaxJar:

As you grow your eCommerce business, it only makes sense to expand to new shopping carts and marketplaces. But with expansion comes scaling issues, and one of those is handling sales tax in your growing empire.

Why?

  • More potential for sales tax nexus – You’re required by your “nexus” states to collect sales tax from buyers in that state. Often, expanding your business – including using 3rd party fulfillment or hiring new employees – means nexus in more states.
  • More room for error – Some channels are more robust than others when it comes to collecting the correct amount of sales tax. For example, Amazon’s sales tax engine takes complicated sales tax rules like sourcing and shipping taxability into account, while eBay’s sales tax engine only allows online sellers to collect a single sales tax rate in a state. Your mileage may vary on other channels.
  • Reporting sales tax collected becomes a chore –The vast majority of U.S. states want you to break down how much sales tax you’ve collected from customers not just within a state, but within each county, city, and special taxing district in that state. This can be a very painful experience, even when you sell on a single channel. When you sell on multiple channels (and don’t use any type of sales tax solution), you are obligated to combine multiple sales reports before you even get started trying to figure out in which county, city, and special taxing jurisdiction your sales take place. Painful!

Wrangle Multichannel Sales Tax the Easy Way

We get it. Scaling can be a hassle. But take these concrete steps and you’ll master sales tax compliance.

  • Automate your sales tax reporting – Trust a sales tax technology that can connect with all of your sales channels and transform that mountain of sales tax data into one return-ready state sales tax report.
  • Troubleshoot with technology – Rely on your “Expected Sales Tax Due Report” to determine where any discrepancies might lie between the sale tax you’ve collected and the sales tax you should have
  • AutoFile your sales tax returns – Remove the element of human error (and the chance for late fees!), and use a sales tax solution to put your sales tax filings on autopilot.
  • Rely on a robust sales tax engine – Are you building your own shopping cart and need to collect sales tax? Do your research and choose a sales tax engine that not only collects the right rate every time, but takes into account complicated sales tax rules like product taxability, shipping taxability and origin and destination-based sourcing.

 

Growing your business is fun, while sales tax is not-so-fun. These tips should help you put a lid on multichannel sales tax!

TaxJar is a service that makes sales tax reporting and filing simple for more than 7,000 businesses.  Try a 30-day-free trial of TaxJar today and eliminate sales tax compliance headaches from your life!

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