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How The Wayfair Sales Tax Case Affects Online Business Transactions

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Just when you assumed you couldn't despise taxes any more than you already do, the Wayfair sales tax case came along and changed that.

After the ruling, the state of South Dakota can more easily enforce their state sales tax on e-commerce who don't live in South Dakota, many financial analysts are predicting that other states will soon follow suit by instituting similar laws.

After this landmark Supreme Court ruling, more states are eyeing their own tax policies in order to replicate South Dakota’s profitable maneuver.

Thankfully though, educating yourself and getting prepared on how to manage sales tax can save you money and mitigate the risks. Here are a few smart tips for managing your sales taxes so they don’t harm you too badly in the aftermath of South Dakota vs Wayfair case.

Figure Out Where You Currently Have a Nexus

It's important that you determine in which states you need to pay sales tax. Automatically, you have to pay sales taxes in your home state, but under certain conditions, you’ll also be accountable elsewhere.

If you want to reassure yourself, check this list of nexus requirements for every state The typically criteria usually deal with:

  • The number of yearly transactions you make in that state.
  • The amount of money in sales you make in that state yearly.

However, some states consider other factors, such as operating an office in that state, hiring personnel who does business for you in that state, or having an affiliate or third-party shippers in that state. If any of those apply to you, double-check with those states’ regulations.

Here's another thing to take into consideration. Because the Wayfair Act is fairly recent, we can expect changes to much of the criteria in the future. It'd be wise to continue checking on your states in order to stay up-to-date on changes as they occur.

Check for Shipping Taxes

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Another thing to check for is whether shipping costs in that state are taxable because in many states such taxes will apply.

Calculating the sales tax incorrectly because of missing this detail will only exacerbate your frustrations, so it’s best to calculate things correctly from the very beginning.

Learn Whether Or Not Your States Offer a Discount

Thankfully, not all of the news is bad! Some states offer discounts on sales tax to reward early sales tax filing, meeting deadlines, where you registered, or even just as a thank you for paying all of your taxes. But you can only take advantage of these discounts if you are aware that they exist, so to cut costs, be sure to investigate what discounts are available in your state of interest.

Conclusion: Stay Up-to-Date

Many are going through a difficult period with the current state sales tax changes in the ecommerce industry, and many experts are forecasting more changes to come.

So, unfortunately, even if you’re compliant to the laws today, the tax criteria may change tomorrow. So we'd advise you to stay tuned for updates in the foreseeable future; we’ll be sure to post any noteworthy sales tax news, so keep checking back here at TheLendingMag.

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