Sales tax laws have changed in recent years, and keeping up with the changes can be challenging for business owners.
In the 2017 Wayfair case, the Supreme Court decided many changes in the ability for states to collect sales and use tax by redefining what would be considered taxable. The decision enables states to mandate that businesses without a physical presence in the state with more than 200 transactions or $100,000 in-state sales collect and remit sales tax on the transactions made within the state.
Unique Challenges for Business Owners
These changes have brought about unique challenges for business owners, especially during the pandemic. In light of shelter in place orders, consumers were forced to shift in the way they purchase items, and online shopping increased exponentially.
One of the biggest issues facing businesses today is increasing sales tax complexity and complying with rapidly changing state laws. Business owners realize that their growth and success have also created new audit risk levels. The risk of non-compliance takes center stage as businesses enter new markets. Furthering the concern is the time required to prepare for audit defense. Now that the workforce is mostly back to normal, we anticipate more sales tax audits.
Changing Tax Laws Created Growth for Software Companies
Changes in sales tax laws have created great opportunities for growth in software companies. These companies provide sales tax calculations as businesses need more help than ever in making sure they are compliant with state laws where they do business.
It has also provided software companies with services to businesses that help with state registrations, integrating data sources, and importing transactions from an e-commerce platform to a sales tax platform. Having the right software in place helps businesses face perplexing sales tax challenges because they can focus on their business and let the software keep on top of the rapidly evolving state and local rules.
At Abacus CPAs, our focus is you! We believe that our employees and clients deserve to interact in an environment that fosters growth, trust, and confidence. Our team focuses on tax, accounting, audit, and business consulting to partner with you and your business. Abacus professionals provide leadership by relentlessly pursuing the best guidance possible so those we serve can make smarter decisions.
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