Taxes can be a nightmare, not only for individuals, but for businesses as well. If your business happens to sell online, your sales tax nightmare just became a little more real. When someone says MFA or Marketplace Fairness Act, as an ecommerce merchant, do you know what that means?
Back in May 2013, the US Senate passed a bill called the Marketplace Fairness Act of 2013, granting federal permission for states to require collection of sales tax by “remote sellers” if states adopt specific measures. This includes mail-order catalogs, phone sales, and you too, internet retailers. Once the bill passes through the House and across the President’s desk, it’s a law, and, as an e-store, you’d better be prepared to abide by the sales tax rates and regulations of every location in which you sell.
Once federal legislation is passed, sales tax rules will still vary widely from state to state and from jurisdiction to jurisdiction. As an internet retailer selling in those states, you will need to be aware of & abide by any and all jurisdictional & product taxability rules as well as everything in between. On top of that, you’ll have to keep up with seasons, events, and holidays, as sometimes rates and locations change according to them. In 2012 alone, divided amongst 46 states, the number of changes in rates, rules, and boundaries equaled or topped seven thousand – seven thousand!
For an ecommerce business owner, it’s time consuming enough to keep up with technology so your storefront stays at the forefront. Throwing sales tax into the mix, especially to such a grand scale, is out of the question. But you have to do it. You have to find a way to stay up-to-date with changes, file on time with different jurisdictions, and do it right in order to avoid a costly, time-consuming audit. Some of the sales tax challenges you can face in 2014 are:
- Broadening definitions of nexus & increasing requirements for out-of-state sellers
- Understanding & following changes in product and service taxability
- Finding the right sales tax rate to charge customers
- Tracking sales tax changes based on holidays, seasons, & events
- Managing exemption certificates
- Identifying the right forms & filing deadlines for each taxing jurisdiction
- Preparing for an audit
- Switching from a manual sales tax management process to a more streamlined, automated process
This is where Avalara AvaTax comes in. It’s an easy-to-use sales tax calculation and filing solution built specifically for ecommerce merchants. It integrates with hundreds of platforms (Magento included, of course) to fully automate tax compliance processes and dramatically reduce the risk of business audits. It’s a web-based service that delivers instantaneous sales tax calculations through a centrally-managed, highly accurate calculation engine. It leverages up-to-date sales tax rates, rules, and jurisdiction boundaries, taking care of the heavy lifting so you don’t have to.
When it comes to filing on time, Avatax takes care of that too. It automates filing in accordance with differing deadlines for different jurisdictions and handles remittance and exemption certificate management as well. AvaTax is the sales tax solution; it provides unprecedented sales tax functionality, boosting business productivity while drastically minimizing risks for an audit. You can rest easy, knowing sales tax is applied appropriately and forms are filed on time, keeping your business safe from an audit and allowing you to focus more on running your ecommerce store.