Is Your New Year’s Resolution to Collect Sales Taxes in 2019?

It’s 2019, and maybe it’s time to collect sales taxes?

Want to Start Collecting Sales Tax at the First of the Year? You Can Do It! Here are the 5 Steps You Need to Take Now.

Sales taxes can seem like an overwhelming and confusing task to take on yourself. At Peisner Johnson we’ve been doing this for the last 25 years and have seen first hand just how complicated it has become.  Now with the recent decision by the Supreme Court (Wayfair) it, it appears that many companies are deciding to just bite the bullet and start collecting taxes. And it seems like they all want to make it effective January 1, 2019. In our podcastthis week, we discussed what businesses should do right away if you want to start collecting taxes on January 1. You can check out the podcast here.

Here’s an executive summary of the 5 Steps along with a list of some of the questions we answered during the podcast:

Step #1: Start With Nexus And Taxability. Figure out where you have nexus first and consider if what you sell is even taxable.

  • How do I determine my nexus footprint?
  • Do I need to get registered everywhere?
  • At what point can states force you to register?
  • Can I register for sales tax myself?
  • What can give me nexus?
  • What if I have been doing business in a state for a long time without having a sales tax license?
  • How do I know if my product is taxable?
  • What should I do if I have significant sales tax exposure in a state?

Step #2: Evaluate Your Taxing System (POS, Website, Amazon, Walmart.com, etc)

  • What do I do to make sure my shopping cart software is set up for sales tax?
  • How to make sure my Amazon seller’s account is set up correctly for sales tax?
  • Do I need to get some developers involved at this stage?

Step #3: Get Registered. States require you to register and/or obtain a license from them before you can collect tax on their behalf.

Step #4: Turn On The Tax. You need to go into your settings in all of your sales channels and turn the tax collection function on to automatically start assessing tax on your sales invoices.

  • How do I start collecting the sales tax?
  • How do I avoid getting in trouble with sales tax in all the states?
  • Can I start collecting the sales tax even if I haven’t gotten my sales tax registration yet?

Step #5: File the Returns. Once you figured out where to collect the tax and you’ve collected the money, then the time will come when you actually fill out the returns and remit the funds. It may be annually, quarterly, or monthly.

  • How often do I need to file sales tax returns?
  • Can I file my own sales tax returns?
Andrew Johnson

Andrew Johnson, CPA has focused his entire career on state and local tax issues. As graduate of BYU with a Masters Degree in Accounting, he began his career with Arthur Andersen in Dallas, Texas. In 1992, he and Jerry Peisner co-founded Peisner Johnson & Company. He is the Author of the book "Start With Nexus" and the AICPA Multistate Income Tax online course.

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