TAS 642: SALES TAX and Best Practices for Ecommerce and Amazon Sellers (2019 Edition)

Is your ecommerce business prepared to handle new sales tax changes that multiple states are adopting? Have you been worried about sales tax compliance and find yourself desperately looking for answers? If so, you’ve come to the right place! On this episode of The Amazing Seller, you’ll hear from Scott and his guest, Martina Chavez from Avalara. In her conversation with Scott, Martina talks about the recent Supreme Court ruling involving Wayfair, the solutions that Avalara has created for sellers, what you need to do to make sure your business is in compliance, and much more. Don’t let the stress of tax stuff distract you! Get the critical information you by listening to this episode!

What happened with the Wayfair case?

If you avidly follow ecommerce news, it's likely that you’ve heard of the Supreme Court case involving the ecommerce business, Wayfair. For those of you who missed the big news, here is what happened in that case.

Basically, the ruling decided that states may charge sales tax on purchases made from out-of-state sellers, even if the seller does not have a physical presence in the taxing state.

This was a major change overturning a case from 1992 which stated that the Dormant Commerce Clause barred states from compelling retailers to collect sales or use taxes in connection with mail order or Internet sales made to their residents unless those retailers have a physical presence in the taxing state.

If you are wondering if this new decision affects your ecommerce business and the state you operate out of, make sure to check out the resource that Martina and her team at Avalara put together, you can find it in the resources section at the end of this post.

How new and seasoned sellers can make sure they are in compliance.

Now that you have a basic idea of what happened with the Wayfair case, you’ll probably want to know how that impacts your ecommerce business. For sellers starting out, this process is easy, start by registering to collect sales tax in your current state (unless your state doesn’t collect sales tax). From there, depending on your volume of sales, new sellers should start the registration process for collecting sales tax in the most populated states like Texas, California, and Flordia. You can also wait and just watch where most of your sales are coming from and start the process in those states.

For more seasoned sellers, the process will prove to me a bit more complicated but not impossible! Basically, follow the same steps as the new sellers need to follow, but you also need to respond to any letters that any states have sent you regarding sales tax compliance. Another good option for many seasoned sellers to submit a Volunteer Discolusre Application (VDA) that allows you to get into compliance with a large up-front sum of money that you have to pay.

The information that Scott and Martina have provided regarding sales tax compliance is only a starting place for sellers like you. Make sure to consult with your professional accountant to ensure that your business is on the right track.

Tax compliance solutions from Alvara.

Let’s face it; all this tax talk is complicated, confusing, and often overwhelming. What if there was a way to cut through all the complexity and trust that all of your tax obligations were taken care of? Good news! The folks at Alvara have worked hard to create a whole line up of solutions that small business ecommerce sellers like you can use.

You can let Avalara handle your sales tax compliance and get more accurate bookkeeping in the process. Avalara can automate sales tax rates, prep, filing, and payment. To hear more about Avalara and the amazing work they are doing to help small business owners, make sure to check out the link to their site located in the resources section below!

OUTLINE OF THIS EPISODE OF THE AMAZING SELLER

• [0:03] Scott’s introduction to this episode of the podcast!
• [3:30] Scott welcomes his guest, Martina Chavez.
• [8:15] Martina talks about the recent case involving Wayfair.
• [17:15] Tax talk is scary only when there is no solution. Martina talks about solutions.
• [25:15] What should new sellers do to make sure they are in compliance with tax rules?
• [31:30] How current sellers can get their business into compliance with tax rules.
• [39:00] Martina talks about how Avalara can help sellers like you.
• [46:50] Closing thoughts from Scott.

RESOURCES MENTIONED IN THIS EPISODE

• Avalara's Resource on Sales Tax Nexus Rules
• Avalara’s Small Business Solutions
• Martina.chavez[at]avalara.com
• Shopify
• Magento