Yes, Sales Tax Is a Reality for Ecommerce Business
For those new to sales tax, I know what you're thinking. You think you don't have to worry about sales tax when you sell online. You've bought products on Ebay or Amazon, and the sellers didn't charge you sales tax, so obviously sales tax must not apply.
Despite what some people believe, any business that sells taxable products needs to collect sales tax in the jurisdictions where they have nexus. What is nexus? It is where your business has a significant presence (offices, employees, sales reps, and property (including inventory)). It doesn't matter whether the business is online or brick and mortar. And it doesn't matter if other people are following the rules or not. You should be aware that this is a liability issue for your business, now before the Marketplace Fairness Act is passed.
A big challenge for an ecommerce business owner is managing sales tax compliance. Understanding collection requirements, configuring your shopping cart or marketplace, managing the sales tax collected, and filing the returns is a complex and time consuming process.
To make matters worse, for Amazon FBA (Fulfilled by Amazon) Sellers, Amazon’s FBA service creates sales tax nexus for your business in the 15 states where Amazon has warehouses. If you are an Amazon FBA Seller and you're making sales to customers in any of those locations, you should be collecting and remitting sales tax as well as filing sales tax returns in each of those jurisdictions. That can be a pretty big compliance headache for a small ecommerce seller.
And what do you do if you haven’t been collecting properly? You know that you not only have to file but you might also have to pay back sales tax in multiple states and it's too late to collect from your customers. You worry that this money will be coming out of your cash flow. We can help you understand your liability and put together a process to get compliant while minimizing penalties and interest.
Catching Clouds provides a complete sales tax management service for our ongoing monthly customers.
We understand the complexities of sales tax compliance for online sellers as well as how to implement a manageable sales tax compliance process. Our cloud accounting service for ecommerce business includes sales tax compliance across the United States.
Catching Clouds leverages cloud technology to connect to your marketplace, shopping cart, and inventory/order management systems to pull together all the information necessary to manage sales tax effectively. We also help configure all of your systems and implement processes for your business to follow to stay compliant.
Catching Clouds’ ecommerce sales tax service makes it easy to budget for your sales tax compliance costs by providing a fixed price service, including special sales tax compliance bundles for Amazon FBA Sellers.
- Sales Tax Analysis / Nexus Study
- Sales Tax License Registration
- Marketplace and Shopping Cart Sales Tax Configuration
- Filing and Remitting Sales Tax
- Sales Tax Management
- Special sales tax compliance bundles for Amazon FBA Sellers