A recent teleconference with Avalara reminded attendees the Sales Tax world is still an elusive target, since the Wayfair Inc. Supreme Court Decision. As businesses try to keep up with its effects, more states are enacting new legislation coinciding with new allowances to collect sales tax from sellers who conduct business in their state – without a physical presence therein. As of this writing, there is a host of states still deliberating over enacting specific legislation affecting marketplaces.
What Updates Did Avalara Provide I Should Know About?
The insights gained in the teleconference demonstrate Avalara’s continuing commitment to being at the forefront of the, once static, world of Sales Tax. If you are just learning of Sales Tax Nexus, or Wayfair Inc. vs South Dakota, here is a list of previous articles; and a recent webinar we did with Avalara, which you can review at your leisure:
- New Sales Tax Rules for Online and Off-Line Sellers
- Our Apps List - Zooming on Avalara Avatax
- New York Sales Tax Vendor Definition Update Effective Immediately
- Sales Tax Webinar with Avalara Recording
With growing complexity taking place in Sales Tax liability determination and rate calculation, the effort to properly track and report, and remit sales tax owed becomes increasingly “taxing”. In the past, you could keep track of sales tax with QuickBooks® Desktop easily when you knew with certainty what items (inventory part or service item types) are taxable and non-taxable, along with customers and vendors sharing the same properties.
If you happen to be a dropshipper, for example, there's a chance you'll have to have a sales tax license in every state in which you deliver products. If you happen to conduct business in a certain state, your rates may be determined by what type of business you are, then calculated from gross receipts your business collects. It also conveyed, outside of what are termed NOMAD states (New Hampshire, Oregon, Montana, Alaska, Delaware) - states where no sales tax is assessed, sellers risk being taxed for anything - services or products (tangible, or intangible - digital products for example).
Can't I Use QuickBooks Desktop or QuickBooks Online to Handle Sales Tax Liability?
Whether you are a long-time or first-time QuickBooks user (QuickBooks Desktop or QuickBooks Online), you will quickly see data entry is predominantly manual in nature. When it comes to Sales Tax Items and Sales Tax Codes catching up to Sales Tax Nexus trends, entry will be intensified. What’s more, if you try accounting for each possibly new Sales tax item, it can easily overwhelm you and your QuickBooks company file.
If you use QuickBooks Pro or QuickBooks Premier, or even QuickBooks Premier Accountant Edition, you run the risk of those hitting hard list limitations for those respective versions. In that case, you may benefit from using QuickBooks Enterprise - even if it is just a matter of your overall lists. Despite the ability to expand your ability to track needed data for your business, entering such information and adapting to every sales tax dynamic can take plenty of time, which then affects overall productivity.
How Does Avalara Help With Sales Tax Dynamics Due to Wayfair?
Avalara's Avtax provides you a portal where you can link your QuickBooks company file with the sales tax rates determined and calculated by it. In terms of determining liability, Avalara's team of consultants work with you; and around your business, to determine where you may be liable, and not, for sales tax collection and remittance when you conduct interstate commerce.
From this, your sales tax items will be greatly simplified. Because of this simplification, reaching your list limits will be greatly mitigated. With calculation being done via Avatax, your transactions and reporting will be more accurate. What makes it more accurate? Avalara realized sales tax rate isn't determined by simply by one's ZIP code; they do the heavy lifting of determining this, so you don't have to.
If you feel like you may be one of those businesses where you will need to collect sales tax - after a long time not having to, let us at Out Of The Box Technology help figure if you need ways to optimize your item list and company file; Avalara's sales tax automation software; any other QuickBooks app to increase overall workflow efficiency and productivity; or help facilitate the delivery of such solutions at a discounted rate on your behalf.