What is Sales Tax Nexus & What Does it Have To Do With Holiday Sales?

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​Rick Bromund demystifies sales tax nexus and how it could come into play for your business with an increase in sales during the holiday season. Have a question? Ask when you register & we'll try to answer it during the webinar!

Rick heads up the tax research team at ComplYant. He's an experienced professional in the tax industry and has previously held positions at Fortune 500 companies as well as one of the big 4 accounting firms.

Note: This topic covers U.S. business taxes only.

Recording Highlights

  • 1:38 - What is sales tax nexus?
  • 2:02 - How do you know if you have nexus in a state?
  • 3:40 - What businesses are affected by nexus rules?
  • 5:40 - Potential challenges
  • 8:22 - What does this have to do with holiday sales?
  • 10:51 - What if I sell on a marketplace?
  • 14:03 - Q&A

Q&A

If I sell products and services is the income on my services included in the nexus calculation?

It depends on the state. You may have to register. Let's say it says all gross sales are included in the nexus calculation. So if you sell 50% that's nontaxable, 50% that's taxable, you have to send in that information to the state, they're gonna say, yes, you are required to register.

Now, once you're registered, you won't have to charge sales tax on those non-taxable services, but you'll have to charge sales tax on the products that you sell that are taxable. And again, this is where it gets down to the language of how each state clarifies it. There are other states that say, no, you only meet the threshold when your taxable products meet that hundred thousand 200,000 or number of transaction threshold.

How do I report sales tax?

For the most part, you would run a report and see the sales tax you collected for the period, you're filing period. It could be a month or quarter if you're emitting a very small amount, or it may be yearly. But you would go fill out the return and then submit the payment with the return.

In your state, you may be able to file and pay online. In fact, in some states, they actually require it, and I think you have to fill out something to explain why you can't do it online to avoid sending it in an actual check. But the good thing is online, it's pretty simple, and it's pretty straightforward. They do try to make it easier for you. And then once you press the button to pay, it's paid, you don't have to worry about that getting in the mail, getting delayed, and then getting a late filing fee on top of that.