Updated: Oct 14, 2020
In July of 2018, the U.S. Supreme Court ruled in South Dakota v Wayfair that states can impose sales tax on sellers that do not have a physical presence (office, inventory, employee) in their state.
In typical fashion, every state has created its own set of rules for what level of sales and transactions constitute economic nexus.
ECommerce and Marketplace companies know the way forward is being everywhere the consumer is with a robust ecosystem. That's why they set up platforms that scale and grow with them like Shopify, Magento, BigCommerce and WooCommerce, to name just a few. Additional exposure on Amazon, Walmart, eBay and Etsy help their brands leverage additional traffic and grow more. Added on top is an Enterprise Resource Planning (ERP) system like Netsuite, Sage or MS Dynamics (or simply Quickbooks), that allows for integration with the shopping cart, marketplace, CRM and warehouse.
Sales tax compliance tends not to make it high on the list of business needs for growth, but the cost of continually not complying is enough to bankrupt a business! The Wayfair ruling is a huge opportunity for states to increase their revenue, especially amid a shrinking brick-and-mortar footprint.
Fortunately, software solutions such as Avalara, TaxJar and Vertex provide a more affordable, integrated and scalable solution than paying a CPA firm tens of thousands of dollars a month in compliance and trying to write new functionality into your online store that will accurately maintain and calculate the sales tax rate of the 11,000+ jurisdictions in the U.S. without sacrificing the load time of the shopping cart. Some solutions can also tackle the challenge of maintaining and enforcing resale certificates for your B2B customers.
We have been in your shoes of needing to find answers to implementing sales tax for our businesses. This is why Goudy Square Consulting focuses on finding and implementing the right sales tax software solution that fits your needs and budget.