Can They Really Tax SaaS?

The internet of things (IoT) is taking over. Most suspect that by 2020, most aspects of our lives will be connected. We’re talking anything from coffee makers, lamps, ovens or refrigerators to wearable devices. Forbes observed in 2014 that “anything that can be connected, will be connected,” and their point is quickly being proven correct.
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The True Cost of the Sales Tax Holiday

You would be hard pressed to find someone who doesn’t like a bargain, which is why so many retailers offer sales throughout the year. You can find a sale for pretty much any holiday, the Memorial Day sales, Fourth of July sales, Black Friday, back-to-school sales and so on. Shoppers flock to take advantage of these low prices, which is why retailers continue to provide them.
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How to Choose An ERP Add On

Yes, ERP is supposed to make your life easier and eliminate manual tasks. No, it won’t work perfectly for everyone straight out of the box. For some businesses, you will an ERP add on to get the full automation that you need to truly run your business on auto pilot. This could include anything from managing sales and use tax in the different states you sell to automating all your invoices and accounts receivable processes. This is largely because every business operates differently. If you’re a smaller operation only selling to other businesses locally, you may not need sales tax automation.
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Entering the Economic Nexus: Proceed with Caution

A recent motivator has left states clamoring to collect more in sales tax. The motivator? $24 billion in uncollected sales tax from ecommerce retail sales. Those states are also collectively facing $19 billion in budget shortfalls over the next year and a half. These are huge concerns for states, forcing them to become more creative and crack down over revenue source, and they’re now looking towards nexus.
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10 Reasons You Need Sales Tax Automation Now

Among all the different technologies that automate business, sales tax is often the last on the list. It takes a great event for many owners to realize they are in need of sales tax automation. Most are wondering, “Why would I need that?” However, there are a lot of signs in business that signal it’s time for sales tax automation.
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Service Tax Rules By State

Consumers are no longer indulging their hard earned money on physical goods, but rather putting that money towards services, like dining out. There are manydifferent types of services that are available to consumers, from business services and professional services, to personal services and repair and maintenance services. In our last post of this series, we took a look at each different type of service that your business may be offering, and which states are known for putting a tax on it. Once you’ve determined whether your state is taxing your service, you’re ready to move onto the next step.
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Defining Service Tax For Your Business

In the first part of this series, we discussed how states that previously relied on a sales taxes are turning to service taxes to make up for a decreased buying power in specific goods. Consumers are now investing their hard earned dollars into services, like hair styling, dining out, personal training or streaming movies. As this trend continues, businesses need to know how and whether they will be affected. In this second part of the series, we will be looking at how states determine and define a tax on service.
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Is Your Business Affected By Service Tax?

American spending trends have been changing over the years, moving away from paying for material goods and instead choosing to indulge on services. Increasingly more Americans choose to eat out rather than buy the groceries to prepare food at home. Thanks to advances in technology, we choose to stream music and movies rather than purchasing a CD or DVD. We even are paying people to helps achieve our ideal bodies, and then turning to someone to make those worn out bodies feel better.
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The Ripple Effect of the Marketplace Fairness Act (MFA)

Marketplace Fairness Act2015 flew by with no federal action on remote sales tax. There were three new bills of remote sales tax legislation passed around the hill, however the subject wasn’t an action item for lawmakers. And yet, it’s an issue that can’t be ignored given action at the state level.
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It’s Almost 1099 Season. What’s Your Resolution?

January is around the corner — and you’re not looking forward to managing 1099s as 2016 starts.  Every year, new Form 1099 reporting requirements are added, making it a headache to keep up. Frustrated and overworked? Not how we want you to start the New Year.  That’s why our New Year’s resolution is to make it easier for you. We’re working with our partner, Avalara, to help you automate and streamline the 1099 process and we’ve got some great resources for you to use below:
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What Sales Tax Changes to Expect in the New Year

Like each New Year, 2016 will bring numerous sales tax changes. Rates will increase or decrease, there will be new rules on product taxability, exemptions will lapse or take effect, and there will be changes to reporting. The main thing certain with regards to sales tax is that change happens. What’s more, it regularly happens without warning.

A New Year is an opportunity to reflect on the past — what went well and what you wish you’d done better. It’s an opportunity for resolutions. This new year, have no regrets with regards to sales tax. Make plans to streamline your sales tax consistence. You’ll see that it’s simpler than getting in shape.

Resolution: Streamline sales tax compliance.

Rates. About twelve states, including Illinois, Maine and Minnesota, have reported local sales tax rate changes for 2016. More will come as January 1st approaches. What’s more, there is talk of rising the state sales tax rate in both Oklahoma and Florida. State revenue departments regularly, but don’t always, report rate changes in time for businesses to account for them. Nonetheless, in complicated home rule states like Colorado and Louisiana, resident governments may not advise state revenue departments of such changes in a timely manner, if they even do it at all.

Resolution: Be certain you have a dependable system set up to oversee sales tax rate changes.

Product taxability. Organizations need to account for changes in product taxability. Sales tax can be extended to services or slapped onto already absolved unmistakable tangible personal property. States for the most part report changes in time for sellers to represent them; yet undesirably, that is not generally the situation. For instance, on June 30, 2015, Governor Jay Inslee of Washington signed legislation that transformed the regulation and taxation of the marijuana market. It took effect the next day.

Product taxability coming in 2016 incorporate the following:

  • Martial arts classes and numerous other physical wellness services will be subject to sales tax in Washington State
  • North Carolina will extend sales tax to installation, maintenance and repair services
  • Retail sales of prepaid wireless communications access will be subject to retail sales tax in Wyoming
  • The list of foods thought to be prepared food (and taxable) will be expanded in Homer, Alaska

Resolution: Successfully process changes in item taxability and do it quickly.

Exemptions. Changing sales tax exemptions are a bear, whether at the local or state level. While several make headlines, like the exemption for firearm safety devices as recently approved by the Michigan Senate, numerous others slip into law essentially unnoticed.

Some exemption changes being considered or set to take effect in 2016 incorporate the following:

  • California’s partial tax exemptions will diminish
  • Florida’s exemption for college textbooks is set to expire, however its manufacturing exemption might be extended
  • Iowa’s machinery and equipment sales tax exemption might be expanded
  • North Carolina will give a sales tax exemption for electricity used in qualifying datacenters
  • Senior sales tax exemptions will be scaled down in Juneau, Alaska

Resolution: Have a failsafe solution for overseeing sales tax exemptions, exemption and reseller certificates.

Reporting. Last to be considered here (but certainly not the last issue sellers want to deal with) are changes to the way sales tax is accounted for. Some of the changes for 2016 include:

  • New reporting requirements for exempt entities in Alabama (this is a big deal)
  • New reporting requirements for sales of consumable vapor items in Alabama
  • Colorado will cease mailing sales and use tax forms for businesses

Resolution: Get reporting and filing correct.

Be prepared.
Sales tax changes are coming in 2016. There will be new rates, item taxability guidelines, exemptions and filing requirements, and the responsibility is on you — the seller — to conform to those changes. Inability to do as such can prompt negative audit findings, penalties, interest, and a ton of hassle. So what’s your plan?

Resolution: Make sales tax less taxing with Avalara AvaTax.

For more details, including a state by state analysis of what’s changing in the coming year, download Avalara’s 2016 Sales Tax Changes guide.

Services Sales Tax Spreads Through States

In most states, services are exempted from sales tax unless explicitly made taxable by law.  So why are the governors of at least two states, as well as legislators in another, fighting to change that? Sales taxation used to focus exclusively on physical goods.  As the United States moved toward a service economy, states started to realize that not taxing services meant giving up billions of dollars in potential revenue.
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