Then there is the question of where to apply the rates: what if a business located in the city north of you buys a pallet of materials delivered to a job site south of you? QB leaves the decisions on this to the user. Sometimes nexis means a brick-and-mortar retail location sometimes it means someone representing your company who visited a locality for the most trivial reason and now you are liable for sales taxes. You may want to ask an accountant or colleague about this (or your QB sales tax app provider), and read-up on the local situation yourself, because the local definitions of nexis vary widely. The first issue in dealing with sales taxes is “Nexus.” If your business has a nexis (defined loosely as a significant presence where you may be using local government resources) in a taxing jurisdiction, you are likely required to deal with their sales tax codes, tax rules and more. Increasingly, and like payroll taxes, sales-taxes cannot be managed by mere humans and are best handled by some great apps and web-services specializing in this area (some listed at the end of this article).
Many businesses operate from more than one location now, there are e-stores, and local regulations have grown vastly more complex in providing special exemptions to favored taxpayers and products, and many local governments (in California for example) have piled-on with special tax surcharges.įollowing are 9 quick overviews on areas to know about in deciding how your business can best comply with sales tax requirements. Long ago everyone agreed that sales taxes should be simple: businesses would collect a small tax on certain sales and local governments would not interfere much. A wrong guess can leave your operation liable for uncollected sales taxes, which often generates losses on affected transactions (yes, because local governments often make better margins on sales than the business). QB (herein, both QuickBooks desktop and QB Online products) have native features for dealing with sales taxes, but leave much of the decision making on each transaction up to the business. I won’t tell you that there are “seamless” solutions out there but certain apps and automation services can help. Business owners must act as the unpaid agents of the government in deciding what and who gets taxed, collecting the tolls, and remitting to one of many state governments, while hoping that all is correct to avoid penalties and intrusive audits. Sales taxes are a pain for most businesses.
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