We all love a short break in the workday. And we all love thinking about taxes! Okay...maybe not that second thing. Still, grab your warm drink of choice, and let’s play a quick game that tests your knowledge on current sales & use tax regulations. How many of the following questions will you get right?
1. Nexus can be defined as:
a. A business’s obligation to collect and remit sales tax to the state in which the business operates
b. An exemption from sales & use tax
c. The taxable amount of a sale
d. The jurisdictions to which a business must collect and remit sales tax
2. Most nexus errors can be attributed to which of the following activities?
a. Having customers who are exempt from sales tax
b. Attending a trade show in the last 12 months
c. Having a remote sales force
d. All of the above
3. Use tax should be paid by the purchaser to their home state for which of the following examples?
a. Purchase something in another state and brought that item to your home state
b. Purchase something by phone, subscription, mail-order catalog, or online without paying sales tax
c. Purchase something through someone not authorized to collect sales tax, such as furniture through a newspaper or local online ad
d. All of the above
4. True or False? - Sales and use tax are only relevant to retail sales and then only at the point of sale.
5. There are approximately ________ jurisdictions within the U.S., each establishing their own nexus rules.
7. ________ of accounting professionals incorrectly believe that you only owe uncollected taxes after an audit.
8. The average audit among small to midsize companies costs more than _______.
9. On average, accounting professionals spend ________ hours a week filing sales tax returns and remitting payments
Find the answers by downloading this free eBook!
Even companies operating in states without sales & use tax may be liable for taxes under certain circumstances, and meeting the requirements may seem like trying to hit a moving target. Technology solutions can help ensure that your sales tax returns are accurate and reduce the risk of an audit. As a result, your business should be able to run more efficiently and provide your customers with a more positive buying experience.