You have questions?

Answers to Frequently Asked Questions

• There seems to be some confusing rules about nexus; what is the best rule to apply?

  The U.S. Supreme Court ruled in 1992 that states can only force companies to register and collect sales tax if the taxpayer has a physical presence in the state. As noted above, physical presence does not mean having an office in the state. It means any contact with the state.

  Sending employees or independent contractors into the state for 2 or more days a year can create nexus, having property stored in a warehouse or distribution center can create nexus, performing training or repair services can create nexus. Any physical connection between your business and the taxing state can create nexus. Some states are unhappy with this rule, and are developing their own nexus rules that are based on the amount of sales that occur in a state. These are called economic nexus rules. The courts are currently evaluating these rules. Taxpayers must carefully consider how they want to deal with states that assert these ‘economic nexus’ rules. If a company is audited or assessed tax under these rules, it will cost a considerable amount of money to fight these challenges in court.

• Does my business have sales tax nexus outside of my own state?

  If your business has employees that travel to meet with new or existing customers in another state, or if your company uses independent sales representatives to solicit sales in another state, or if your company has inventory or other property located in other states, or if your company rents an office or a warehouse in another state, or if your company uses people in another state to perform services on your behalf for customers in another state, then your company may have nexus. Once your company has nexus, the next step is to determine if your company is doing anything that is taxable in the state.

• Are states currently enforcing sales tax on out-of-state businesses?

  Yes. States invest significant resources in tracking down and auditing businesses that have nexus in their state and are selling taxable products or performing taxable services in their state. Once a business is contacted for an audit, there is little opportunity to implement liability-minimizing tactics. The only way to minimize exposure and limit the risk is to address these issues aggressively and proactively. States also share information with other states, so it is possible that your company may be contacted by several states over a short period of time concerning an audit

• I am a start-up and don’t know where to comply sales tax.

  I suggest consult with a state and local tax experts (SALT) – 1 hour or consult with a state and local tax experts (SALT) – 30 minutes for professional advice.

• Do I need to send my sales transaction every day for sales tax filings?

  No – your sales transaction data is gathered only once per filing period allowing you to tend to your business’s demands.

• I am tired running my business and want to close it out? How much is the fee?

  Closing a business is very similar to opening one, it requires a lot of paperwork. We are here to help make the transition a little smoother by closing out any state sales tax accounts for you at a fee of $49 per state.

• I have different selling platforms like Amazon, eBay, Shopify, WooCommerce, etc. Do I need to file separate sales tax returns for each platform?

  No – A sale is a sale no matter what the sales channel. Your sales tax license for each state will allow you to report all your sales on a single return and remit any sales tax owed.

• What is your fee prior to sales tax filings?

  We have the most competitive rates in the industry for the level of service and attention to detail provided to ensure your filings are accurately filed. Flexible tier packages are available to suit your needs no matter your business’s size, volumes, or stage in its growth.

• What are the filing frequency for each state?

  Each state has different filing frequency: Monthly, Quarterly, and Annually

• What is Quarterly Prepayment for California filings?

  Prepayments are not like returns, they are simply payments.  CA deems that the quarterly tax liabilities are too large to be made just once per quarter but were eliminating monthly frequencies from their calendars so the Quarterly Prepayment frequency, or basis, was developed.

  • They are literally payments made in advance.
  • If your tax due for Q1 2019 is $10,000.00 each month for a total of $30,000.00 then you would:
    • Prepay $10,000.00 for Jan by Feb 24^th
    • Prepay $10,000.00 for Feb by Mar 24^th
    • When you are filing the return you will take the prepayment credits for Jan and Feb so that it deducts $20,000.00 from your total tax liability for the quarter which will leave you with the remaining $10,000.00 due.