- Sales tax is an additional amount added to the price of goods or services sold to the final buyer.
- Understanding sales tax involves knowing the rules and regulations, which can be complex and vary by state.
- States frequently update their nexus rules, taxability rules, and reporting deadlines.
- Businesses need accurate information to avoid miscalculations, late filings, and audits.
- The Sales Tax Institute provides resources to help understand obligations, taxability, exemptions, and compliance.
- Nexus is the connection between a business and a taxing jurisdiction, determining sales tax collection responsibilities.
- Physical nexus can be created by office locations, remote employees, contractors, or storing property in a state.
- Economic nexus, established by the 2018 South Dakota v. Wayfair decision, ties businesses to jurisdictions based on economic activity.
- Economic nexus is determined by sales thresholds and transaction numbers, which vary by state.
- Alaska removed the transaction threshold, focusing on gross sales for economic nexus.
Source: salestaxinstitute.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
