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We have seen so much made of SD v Wayfair this year, is there any difference on the impact for large vs small sellers?
With the recent Supreme Court decision of South Dakota vs. Wayfair, it’s fair to say that almost every online seller is impacted, no matter what size business they run. The introduction of economic nexus is a new concept for many sellers that adds a bit more complexity to managing sales tax for an eCommerce business.
Understanding what economic nexus means is the first step in interpreting these rulings for any eCommerce seller. TaxJar is committed to providing education through our Sales Tax Blog to explain what these new laws mean in simple, easy-to-understand language.
Once a seller understands economic nexus, the next step is to determine where their business may have liabilities. We know this can be a challenge, so we’ve introduced a completely free tool to help you figure that out.
The TaxJar Sales & Transactions Checker can help anyone, no matter what size business they run, find out where they may have economic nexus in minutes.
For sellers with a large footprint across the united states, economic nexus might have little to no impact on their sales tax requirements. They may already be collecting, and may already have tax teams in place in order to manage these changes easily.
For sellers with small teams and or individual business owners, this change may require a larger investment of time and resources in order to understand the changes thoroughly and prepare a plan for compliance.
Regardless, with technology that exists today like TaxJar, we hope to make it easy and simple to handle sales tax for any size seller. Large or small, we aim to make eCommerce easier for everyone. Because sales tax is now a cost of doing business in the eCommerce space, we’re committed to solving this for all businesses, no matter what the size.
Does this have an impact on taxation of shipping costs?
A majority of states consider shipping charges to be a vital part of the transaction, and therefore consider shipping charges taxable. But a little less than 1/3 of states, though, do not considers hipping charges taxable as long as they are separately stated on the invoice or receipt.
The Supreme Court changes don’t have any impact on whether or not shipping on a particular sale is required; however, when you’re calculating how much gross revenue you’re making in a state, it’s important to know whether to include S&H into that amount.
As with any definition relating to sales tax, it’s up to the states to determine if S&H is included in the ‘gross revenue’ amount that applies to the state thresholds for
For online sellers that have never dealt with online taxation, what resources would you recommend?
If you’re new to sales tax or online taxation, we recommend the TaxJar Sales Tax Blog. This resource covers ~900 posts relating to everything you need to know about sales tax.
Some helpful starting points are: