In late June, the Supreme Court of the United States - in a 5-4 decision - ruled in favor of South Dakota that states may charge tax on purchases made from out-of-state sellers, even if the seller does not have a physical presence in the taxing state. This decision is a drastic departure from the high court's previous interpretation of The U.S. Commerce Clause in this area and in fact overturns Quill Corp. v. North Dakota. Such a broad expansion of nexus has out-of-state retailers concerned about a new set of obligations with regard to sales tax collection and reporting. This ruling is just the latest chapter in the story of sales tax nexus, which has been heating up since states found themselves starved for revenue during the recession of 2008.
Why do states select some companies for audit while leaving others in peace? There are several factors, few of which will come as a surprise:
- Past audit history
- Volume of sales a company reports to the state
- Volume of exempt sales claimed
- Ratio of exempt sales to total sales
While most of these elements seem obvious, that last criterion can be puzzling: Industry. Yet this factor has started accounting for more and more audit activity across the United States, and it doesn’t show any signs of slowing down. So what exactly does a company's industry affiliation have to do with the chances of an audit, and what else should businesses know? Download this free white paper, compliments of the tax experts at Avalara, and find out.
On June 21, the Supreme Court of the United States ruled in favor of South Dakota in the South Dakota v. Wayfair, Inc. case. If you've been reading our blog posts related to the topic of nexus, you'll realize why some people are worrying that this 5-4 decision could put an end to “tax-free” shopping for good. Out-of-state retailers might now have a new set of obligations and challenges ahead of them, while states could potentially gain billions in revenue from taxing out-of-state sellers on their online sales. But what does it mean for your business?
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?
Sage Software will only be updating Sage 100 version 2018 and Sage 100Cloud version 2018 to accommodate the new, statewide Oregon Transit Tax, which goes into effect on July 1 of this year. As we mentioned in our preview last month, the Transit Tax is 0.1% of each and every Employee’s Withholding Wage, is to be reported quarterly, and is reported on a separate form that is not part of the Oregon OQ Quarterly filing. For Sage Payroll clients on versions 2014, 2015, 2016, or 2017 (or even older versions!), we’ve had to be creative to accommodate the new tax. For clients using Sage Payroll version 2018, you’ll receive the update automatically through the new 2018 Tax Engine at month end.
In addition to the (hopefully) sunny days of summer, July 1 of this year brings with it a host of legislative changes that will impact employers and their employees. Here are three of the most critical employment changes that you'll want to know about.
As commerce grows increasingly virtual, lawmakers are adapting legislation to help maximize tax revenue in their states. But with all the changes, it's all accounting and finance professionals can do to keep up. Wakefield Research investigated why sales and use tax compliance is so complex and difficult to get right, and the results are contained in this free, downloadable report.
In mid-January we released a blog asking if the new tax tables mean more money for people's paychecks. In that post, we reported that The Tax Cuts and Jobs Act, which was passed by the federal government in December, resulted in changes including increased standard deductions, removal of personal exemptions, increased child tax credit, and revisions to tax rates and income brackets effective for 2018. We also let you know that the IRS was working on updating the income tax withholding calculator and the Form W-4.
Because Oregon has no sales tax, many businesses that we work with don't have to concern themselves with compliance in that particular area. But as you might have learned about from reading our recent free whitepaper on sales tax changes arriving in 2018, cross-state sales tax compliance is a growing issue for growing companies. You want to be as certain as you can that your day to day activities aren't provoking unseen tax obligations. Here's an on-demand webinar to further your awareness of taxes.
State and federal tax law changes are causing employees everywhere to stop and reconsider what they are seeing on their paychecks. Even if workers don't see any adjustments at all, it might be a good time to evaluate the amounts being deducted for accuracy. After all, nobody likes surprises during tax season, and next year's might be a doozy for those who don't align their withholdings to the correct expectations.