On June 21, 2018, the U.S. Supreme Court issued its decision in South Dakota v. Wayfair, ruling that a physical presence within a state is no longer required to reach substantial nexus. Although the ruling was issued almost 5 years ago, it remains a major source of questions and confusion for many business owners still trying to navigate it.
Because there are now various factors beyond physical presence for establishing nexus, and those factors differ from state to state, if you are a business owner that sells across state lines, you have most likely felt the headaches of filing your sales tax returns. In a recent webinar, our BerganKDV State and Local Tax (SALT) team discussed methods for determining your nexus and sales and use tax liability and strategies to streamline your sales tax return processes.
Here’s a breakdown of the options mentioned in the webinar to help reduce your exposure to Wayfair so that you can feel confident that your sales tax returns are accurate and compliant.
Exemption Certificates
If you discover that you established nexus in a state you were unaware of and should have been filing sales tax returns for that state, you can fill out and submit exemption certificates to help get in front of a potential audit. To complete the certificate, you conduct a self-audit to determine what you owe the state you were unaware you had nexus in and notify the state of the money you owe before it performs its own audit. When submitting an exemption certificate ahead of time, in most cases the state is open to accepting your self-audit information and collecting the money owed then and there.
Utilizing Technology
Exemption certificates are incredibly complex to fill out manually and illustrate how difficult it can be to confirm which states your business has established nexus. Luckily, there is technology on the market that can automate the certificate process and help you determine which states you have tax liability in. Vertex is an industry-leading software designed to streamline sales tax processes for those in multi-state environments. It includes features such as exemption certificate wizards and nexus dashboards that make staying tax compliant easier.
Consider an Outsourced Accounting Partner
With state audits on the rise and more businesses selling products virtually, it’s become more challenging than ever to know which states you have reached nexus in. Ensuring your business is tax compliant is key to its overall financial health and success, and that’s why many business owners outsource their accounting needs to confirm everything is as accurate as possible. Outsourced accounting teams take the burden of determining nexus and tax liability off your shoulders and assist with your filing processes, so you don’t have to navigate it all alone.
At BerganKDV, we routinely partner with clients on their sales tax needs to help them stay compliant so that they can focus on growing their businesses. We offer clients powerful technology like Vertex so that clients feel confident knowing they are correctly filing their sales taxes.
Interested in learning more about what solutions BerganKDV offers to ensure your sales tax processes are compliant and streamlined? Contact us today and one of our team members would be happy to work with you!
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