Online sales tax | Aggressive states to be aware of and why

TL;DR

States are becoming aggressive with online sales tax audits due to revenue loss, utilizing methods like partnering with Amazon and increasing resources.

Transcript

hi online sellers this is kasheen from ledger gurus and today i'm going to share with you what are the most aggressive states when it comes to sales tax before i jump into the content if you haven't done so please subscribe to our channel so you get the most accurate and timely advice when it comes to accounting and sales tax overall because of cov... Read More

Key Insights

• 💁 States are partnering with Amazon to obtain seller information for auditing.
• 🧑‍🤝‍🧑 Registration dates are being questioned, especially in South Dakota, North Dakota, Wisconsin, and Maine.
• 👂 Utah and Connecticut purchased lists of online sellers to verify economic nexus.
• 💁 States share information and form alliances to increase audit efforts.
• 🇳🇨 States with resources like Michigan, New York, and Texas are aggressively auditing remote sellers.
• ✳️ Proper nexus analysis is crucial for online sellers to avoid audit risks.
• 👨‍💼 Compliance with sales tax regulations is increasingly crucial for online businesses.

Questions & Answers

Q: What are some methods states are using to be aggressive in sales tax audits?

States partner with Amazon, question registration dates, purchase seller lists, share information, and increase auditing resources to ensure compliance and reclaim back taxes.

Q: Which states have been particularly aggressive in auditing online sellers?

States like California, Washington, South Dakota, North Dakota, Wisconsin, and Maine have shown aggressive auditing tactics towards online sellers to recoup lost revenue.

Q: How can online sellers assess their risk exposure to sales tax audits?

Online sellers should consider states' aggressive tactics, partnership with Amazon, registration questioning, information sharing, and auditing resources to determine where to register and remit sales tax.

Q: How does the Wayfair decision affect current sales tax registrations?

The Wayfair decision has led states like South Dakota to question historic registration dates and request proof of meeting economic nexus rules, increasing scrutiny on online sellers.

Summary & Key Takeaways

• Due to revenue loss from COVID-19, states are aggressively auditing online sellers.

• Methods include partnering with Amazon, questioning registrations, and sharing information between states.

• States like California, Washington, Utah, and Connecticut are actively auditing online sellers.