HOW TO KEEP UP WITH TAX LAW CHANGES

HOW TO KEEP UP WITH TAX LAW CHANGES – BY ALEXIS SADLER

“Last November at QuickBooks Connect I attended a seminar on Sales Tax.

There has been a rumor dancing around the bookkeeping community on what changes are taking place and how they will effect business owners and their professional support.

In that seminar I learned of the changes in U.S. tax law that are sweeping across the nation. The most profound change was the case of South Dakota v. Wayfair, Inc. It used to be that states could only create a sales tax obligation based on a physical presence within that state. South Dakota has now changed the game.

Now economic activity (a.k.a. “economic nexus”) in South Dakota can also create that obligation to collect sales tax.

QuickBooks ProAdvisor
Alexis Sadler

Your economic nexus can be based on sales revenue, transaction volume, or both.

32 of the 50 states have introduced tax obligations for businesses that exceed economic nexus in their state, including California, and all 50 states are expected to follow suit.

But keep in mind now there are also other ways that remote sales are being taxed: affiliate nexus, click-through nexus, cookie nexus, tax on marketplace sales, and non-collecting seller use tax reporting.

Short and sweet basically what this means is if you fall within certain parameters you will need to file at least one sales tax return – if not multiple returns – for each state you have sales.

Rocket Bookkeeping Services

This change in the process is pushing us at Accounting Therapy to think about what we recommend to clients. 

We are thinking the best process would be to transition our clients to a software like Avalara, because they ensure your sales tax obligations are calculated correctly and are familiar with how to maintain compliance with tax obligations when tax laws change. 

Avalara’s software automatically does this for you and so we think it’s a great option for most businesses who want to be confident their returns are being filed correctly. 

Avalara
We recommend Avalara for automatic compliance with changes in tax law

We will keep you posted on ways you can transition to an automated service like Avalara and if you would like to get this process started sooner please follow this link.

We’ve also addressed in previous posts what you need to know about the latest tax law changes, see what you need to do if you’re a retailer here.”

Alexis Sadler