How to avoid the anxiety of ever-changing tax rates and rules

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Tax Rates
Ensure you're collecting the correct tax on all DTC transactions on every sales channel
Track Nexus related to B2B and DTC sales in every state.
Ensure your Customer Exemption Certificates are always in order
Remove the time and effort of filing returns accurately and on time

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Accurately Collecting Sales Tax

The right rate every time

Dynamic Taxing, Sate legislation, local jurisdictions, special taxing districts

Tax is dynamic.

Sales tax rates in the United States can change at various intervals, and the frequency of these changes can vary depending on several factors.

01

State Legislation

State governments have the authority to adjust sales tax rates.

02

Local Jurisdictions

Cities, counties, and special districts can impose their own sales tax rates.

03

Special Taxing Districts

Some states have special taxing districts that impose additional sales taxes for specific purposes

Solution

Our solution seamlessly updates tax rates in your system as they change. If you trade through a selling partner like Meta, Etsy, Amazon, etc., our solution automatically takes into account that they’ve collected sales tax on your sales.

The Facts

The Taxman wants to know what you sold DTC and B2B in every state.

Thresholds?

B2B (business-to-business) and B2C (business-to-consumer) nexus thresholds refer to the criteria that determine when a business has established sufficient presence or activity within a particular jurisdiction to trigger sales tax obligations.

Solution

Our solution helps you identify where you have established nexus, whether through sales revenue, transaction volume, or other factors defined by state tax laws. The solution offers real-time visibility into nexus thresholds and provides automated notifications to alert you when your business approaches or exceeds these thresholds.

Nexus thresholds apply to B2B and DTC

Peace of mind: Nexus and State tax thresholds

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Exemption certificate

Peace of mind: Exemption Certificates

Problem

Failing to obtain customer tax exemption certificates can expose you to various liabilities and risks, including financial losses, legal disputes, and damage to your reputation (see FAQ). You must obtain documentation from your customers and maintain accurate records to ensure compliance with tax laws and regulations.

Solution

Streamline your tax compliance with our solution. Easily collect, store, and track tax exemption certificates from customers, reducing the risk of fines, audits, and disputes.

Tax automation by

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Tax filing

Peace of mind: Filing Taxes

Problem

Preparing and filing tax returns to meet deadlines consumes time and expense.

Solution

Our solution automates the complex and time-consuming tasks associated with tax preparation and filing.

This helps wholesalers accurately calculate tax obligations, prepare and file returns, and manage remittances across multiple jurisdictions.

FAQ

What is Nexus?

Nexus refers to a business’s connection or presence within a specific jurisdiction, often a state or locality, which subjects it to the jurisdiction’s laws, including tax laws. In the context of sales tax, nexus determines whether a business must collect and remit sales tax on transactions conducted within that jurisdiction.

Nexus can be established through various factors, such as physical presence (e.g., having a brick-and-mortar store or office), economic activity (e.g., reaching a certain threshold of sales or transactions), or other factors defined by state tax laws.

Understanding the nexus is crucial for businesses to ensure compliance with sales tax obligations and avoid potential penalties or legal issues.

For a wholesaler who has not obtained tax exemption certificates from their customers, there can be several potential liabilities and consequences:

1. Sales Tax Obligations: Without tax exemption certificates, the wholesaler may be required to collect and remit sales tax on transactions involving taxable goods or services. Failing to do so could result in penalties, fines, or legal action from tax authorities for non-compliance with tax laws.

2. Financial Losses: If the wholesaler fails to collect sales tax from non-tax-exempt customers, they may bear the financial burden of paying the uncollected taxes out of their funds. This can impact the wholesaler’s profitability and cash flow, leading to economic losses.

3. Customer Disputes: Customers who believe they are entitled to tax exemptions but still need to provide the necessary documentation may dispute the sales tax charges levied by the wholesaler. This can result in strained relationships, customer complaints, or even legal disputes, affecting the wholesaler’s reputation and business credibility.

4. Audit Risks: Non-compliance with tax laws, including failure to obtain tax exemption certificates, can increase the risk of audits by tax authorities. During an audit, the wholesaler may be required to provide documentation and evidence to support their tax-exempt sales, and failure to do so could result in additional penalties or sanctions.

5. Compliance Costs: Besides potential fines or penalties, the wholesaler may incur additional costs associated with rectifying non-compliance issues, such as hiring tax advisors or consultants, conducting internal audits, or implementing new processes and controls to ensure future compliance.

Failing to obtain customer tax exemption certificates can expose wholesalers to various liabilities and risks, including financial losses, legal disputes, and damage to their reputation. Wholesalers must understand their tax obligations, obtain the necessary documentation from customers, and maintain accurate records to ensure compliance with tax laws and regulations.

B2B (business-to-business) and B2C (business-to-consumer) nexus thresholds refer to the criteria that determine when a wholesaler has established sufficient presence or activity within a particular jurisdiction to trigger sales tax obligations. These thresholds vary depending on the jurisdiction and can be based on factors such as sales revenue, transaction volume, or the number of transactions conducted within a certain period.

For B2B transactions, the nexus threshold typically applies to sales made to other businesses within the jurisdiction. Once a wholesaler surpasses the specified threshold, it must collect and remit sales tax on its B2B sales within that jurisdiction.

For B2C transactions, the nexus threshold applies to sales made directly to consumers within the jurisdiction. Similarly, once the threshold is met or exceeded, the wholesaler must collect and remit sales tax on its B2C sales to customers within that jurisdiction.

The liability for failing to meet sales tax obligations varies depending on the jurisdiction’s laws and regulations. Businesses that exceed the nexus threshold but fail to collect and remit sales tax may face penalties, fines, or legal action from tax authorities for non-compliance.

Additionally, they may be responsible for paying any unpaid sales tax owed, along with interest and other fees.

Wholesalers must understand the nexus thresholds in each jurisdiction where they conduct business and monitor their sales activity closely to ensure compliance with sales tax laws.

Failure to do so can result in significant financial and legal consequences. Consulting with tax professionals or legal experts can help wholesalers navigate nexus requirements and ensure compliance with sales tax obligations.

The short answer is often and unpredictably.

Sales tax rates in the United States can change at various intervals, and the frequency of these changes can vary depending on several factors, including:

While there is no fixed schedule for sales tax rate changes across the United States, businesses should stay vigilant and monitor for updates from state and local tax authorities to ensure compliance with current tax rates. Additionally, companies can utilize tax automation software and services, such as those offered by Avalara, to stay informed about sales tax rate changes and seamlessly update their systems accordingly.