Whether you are a new or seasoned business owner, avoiding paying for sales tax out-of-pocket this holiday season is essential! With the holiday shopping surge right around the corner, here are 3 tips you could put into action today to help prevent wasting a ton of money paying sales tax out-of-pocket.
When you upload new products into your store, it is critical that you have your sales tax settings correctly enabled on the new product. Not doing this can mean that you will not collect tax on taxable sales. This can lead to the unfortunate experience of paying a substantial amount of sales tax out-of-pocket this holiday season.
This mistake usually happens in one of two ways:
Here are some resources you can use to set-up sales tax in your e-commerce channels yourself (psst … but wouldn’t it be easier if we did this all for you?):
States have been rolling out new economic nexus requirements left and right. In October 2019 alone, we saw six new states roll out economic nexus threshold policies (including Texas). This means that you may owe sales tax in a state without having a physical presence.
Most economic nexus thresholds are $100,000 in sales over a 12-month period or 200 transactions. Some states have higher or lower thresholds than this, however. You can see each state’s economic nexus thresholds by clicking here.
Get sales tax permits where you need them now so that you can avoid paying out-of-pocket and accruing back tax liabilities this holiday season. We perform this analysis as part of our Done-for-You Sales Tax Service.
Many e-commerce business owners pay out-of-pocket for sales tax on shipping and handling charges because they don’t realize that they are taxable in many states. Now is the time to enable shipping and handling settings properly. If you are already charging your customers for shipping, you should double-check that your platforms are set-up correctly.
As part of our new client onboarding in our Done-for-You Sales Tax Service, we double-check that your shipping and handling settings are enabled correctly.
While this is a great place to start, these three tips really represent the tip of the iceberg when it comes to avoiding paying sales tax out-of-pocket this holiday season. We could go on for hours highlighting the many ways to ensure your company is set up correctly with sales tax.
Now is the time! Avoid paying sales tax out-of-pocket this holiday season and pay attention to your sales tax settings early.