Businesses are required by law to collect and remit sales tax in states where they conduct business; however managing that process manually can be overwhelming and error prone. It’s been estimated that for every $1 sales tax error, the cost to fix the error easily exceeds $50. Knowing the factors that determine nexus, the obligation to collect and remit tax where business is conducted, is the first step to ensuring your business is adhering to sales tax laws.
Owning or leasing any real or personal property in another state
Having company personnel deliver products in another state
Renting or owning out-of-state storage, warehousing pr drop-shipping facilities
Automation using a cloud-based tax management service saves costs by providing a solution that is scalable to the needs of the business. A full-lifecycle automated solution will include tax calculation, exemption certificate management and filing and remittance.
When seeking an automated solution, companies should look for a product that provides:
Thorough tax analysis of state rules and regulations
Accurate calculations based on sourcing rules, jurisdiction and product taxability
Exemption certificate management for non-taxed transactions that includes:
Digital collection of exemption certificates
Easy accessibility
Certificate to customer and transaction association
Reporting capabilities
Full sales tax cycle support with filing and remittance of returns
Easy integration with ERP/accounting, eCommerce, or retail solutions
Avalara offers the industry’s leading sales tax automation solution and meets the criteria above. Avalara’s AvaTax solution is cloud-based, so it is fast, accurate, reliable, and most importantly, affordable. AvaTax helps organizations mitigate risk and avoid sales tax non-compliance.
The Sage Sales Tax / AvaTax family of products includes:
Sage Sales Tax
Sage Sales Tax delivers real-time sales tax calculations based on up-to-date sales and use tax rules including: sourcing rules, product taxability and jurisdiction assignment.
AvaTax Certs
AvaTax Certs is a complete exemption certificate management service. From wizard-driven online collection to associating the correct certificate with transactions, AvaTax Certs ensures you maintain compliance and reduce your audit risk.
AvaTax Returns
Dramatically increase accuracy and reduce the time your company spends on sales tax return processing with AvaTax Returns. AvaTax Returns automatically processes e-file, hard-copy and Streamlined Sales Tax returns for businesses of all sizes.
To learn more join Brainsell, in partnership with Avalara, at a FREE, informational webinar: States, Rates and Debates: Why you should leave sales tax compliance to the experts; Tuesday, November 29, 2011, @ 1:30 PM/ET. Learn about sales tax compliance best practices and real life examples of success. During this webcast you will discover how Avalara’s solutions – which offer seamless integration with your Sage Software ERP – can save your company time and money.
Yesterday, the Senate voted down amendments to strip out IRS reporting requirement in the new health care law.
While both Republicans and Democrats agree that a new tax reporting requirement in the health care law should be scaled back, each party defeated the other side’s proposal to accomplish that goal.
Senators just voted 46-52 against an amendment by Sen. Mike Johanns, R-Neb. that would have stripped out the provision, which requires businesses to report to the IRS transactions to anyone or any company that cost more than $600.
The Senate then defeated a similar amendment by Sen. Bill Nelson, D-Fla. Nelson’s measure, which went down in a 61-37 vote, would have raised the reporting requirement to $5,000 and excluded businesses with fewer than 25 employees.
Seven Democrats voted for the Johanns proposal, which most Democrats and the Obama administration said went too far in rolling back a health care provision that was expected to raise about $17 billion to help pay for an expansion in health care coverage. Republicans for the most part refused to back the Democratic bill because they didn’t think it went far enough and did not like that it would be paid for with a $15 billion tax on oil companies.
The amendments were part of a small business tax bill the Senate is expected to vote on in the coming days. Unless the two parties can agree on a compromise, the tax reporting requirement that nobody seems to like is going to remain in the bill. The reporting requirements are set to begin in 2012
The Senate is reconsidering their harsh 1099 legislation with a vote tomorrow. Here’s a run down of what might change.
The Senate will vote Sept. 14 on giving small businesses relief from a new paperwork burden imposed by health care reform.
That law requires businesses, beginning in 2012, to file 1099 reports with the IRS any time it spends more than $600 a year with another business on goods and services. The provision was included as a way to help pay for health care reform – the theory is that third-party reporting of sales will make businesses less likely to hide income from the IRS.
Businesses currently have to file 1099 forms only for services supplied by unincorporated contractors. Health care reform’s significant expansion of the 1099 requirement has prompted howls of protest from small businesses, who fear they will be swamped by the additional paperwork.
Senate Majority Leader Harry Reid, D-Nev., has scheduled votes on Sept. 14 on two amendments to the Small Business Jobs Act that would address the 1099 requirement in different ways.
An amendment by Sen. Mike Johanns, R-Neb., would repeal the requirement.
A competing amendment by Sen. Bill Nelson, D-Fla., would exempt businesses with fewer than 25 employees from the requirement and would raise the dollar threshold for reporting purchases from $600 to $5,000. Nelson’s amendment also would exempt credit card purchases from the 1099 requirement, something the Treasury Department already was planning to do.
Nelson’s amendment isn’t good enough for the National Federation of Independent Businesses.
“We don’t need an alternative,” said Susan Eckerly, senior vice president of the NFIB. “We need full repeal.”
A few months ago, a key piece of legislation was uncovered in the 1000 + page health care bill. It states that businesses have to give 1099 tax forms to vendors for services and goods worth $600 or more. People are UP IN ARMS about this hidden measure. It will pay for a nice little chunk of health reform, $19 billion over 10 years. No wonder it was sandwiched in the middle, where it took months for people to find.
Business people have raised enough hell for legislatures to take a second (or first) look at the measure. They’re taking two positions on it. Get rid of it all together, or modify it. The modification raises the $600 reporting mark to $5000. Businesses with less than 25 employees would be exempt. And all credit card transactions would be exempt too.
The Senate will hold a vote on the amendment on September 14th.
For more detailed information on the amendment, take a look at the New York Times article by Robb Mandelbaum.
The Federal Hire Act of 2010 has a few if’s and but’s. Here’s the new legislation in a nutshell…
Companies who hire unemployed workers this year (after Feb. 3, 2010 and before Jan. 1, 2011) may qualify for a 6.2-percent payroll tax incentive. In effect, they will be exempt from their share of Social Security taxes on wages paid to these workers after March 18, 2010.
This reduced tax withholding will have no effect on the employee’s future Social Security benefits, and employers would still need to withhold the employee’s 6.2-percent share of Social Security taxes, as well as income taxes. The employer and employee’s shares of Medicare taxes would also still apply to these wages.
In addition, for each worker retained for at least a year, businesses may claim an additional general business tax credit, up to $1,000 per worker, when they file their 2011 income tax returns. For finer details, check out the Fed Site.
The two tax benefits are especially helpful to employers who are adding positions to their payrolls. New hires filling existing positions also qualify but only if the workers they are replacing left voluntarily or for cause. Family members and other relatives do not qualify.
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