Tax laws are confusing – there are innumerable policies, procedures, institutions, jurisdictions, etc. to wade through. On top of that, tax laws are in a constant state of flux. Accurately complying with federal and state tax requirements for internet purchases is a headache; even knowing if you are paying the correct amount of taxes can be confusing.
For example: if you run a business with a physical storefront, collecting sales tax is as easy as charging your customers the tax rate required by law in the jurisdiction where your business presides. Where the situation becomes murky is when you start selling your products online. Do you charge customers the same sales tax rate that you do to those who are coming into your store? The problem lies in the answer to this question – ‘it depends.’
If your company does not have a store, office, or warehouse, you are not required to collect sales t
ax from your customers. Many states, however, are beginning to require internet companies to apply the sales tax of the state in which your customer lives. That is, if you ship your product or sell your service in Arizona, you may need to begin charging Arizona sales tax. Other states are requiring that you send your customers an invoice at the end of the year informing them of the money they have spent so that taxes can be paid on April 15th.
Then there is the fact that several states – Alaska, Delaware, Hawaii, Montana, New Hampshire, and Oregon – do not charge sales tax. In addition, many states offer tax exemptions on certain items, such as necessities, while other states have higher tax rates for items such as prepared food.
Confused? There is no need to be, because there are now internet sales tax solutions available. An internet based software system will make it easier for your business to be compliant with local and federal tax laws and can prevent you from making costly – and possibly illegal – mistakes. These internet software based solutions can be set to automatically adjust for tax law changes. The software also updates frequently, which keeps you attuned to the necessary adjustments your business needs to make to remain compliant with all tax laws.
If you choose not to use sales tax compliance software, all sales data will need to be entered manually. Sales tax rates for multiple locations will have to be manually calculated. Without the software, tax law changes will need to be noted by an individual such as a company lawyer. Schedules will have to be made and followed to ensure that you are paying your taxes on time. Any changes require more manual entry. Worst of all, this manual labor could slow down your business and prevent you from giving your consumers the service they deserve.
An integrated software solution will virtually manage your taxes for you. Once you find the right tax management solution, enter your data, and click the ‘start’ button, you will never have to worry about tax compliance again.
So stop struggling with taxes by contacting by Oates & Company LLC.
