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US Sales & Use tax

Selling in the US presents a unique challenge due to its intricate system of state and local sales tax rates, each governed by distinct regulations. This complexity can make accurately determining the applicable tax rate a daunting task.

Αdding to this complexity is the concept of “nexus,” which serves as the legal basis for tax collection within a state. Nexus criteria, such as inventory storage or sales thresholds, vary from state to state.

Our team of experts can help you determine sales tax nexus, register in the appropriate states, automate sales tax filings and ensure ongoing support for your business.

USA sales and use tax compliance

The Complexity of US Sales Tax

Unlike a VAT system which typically has a uniform rate, US sales tax varies by state and even by locality. This patchwork of regulations can be overwhelming, leading to miscalculations and missed filing deadlines.

There are over 10,000 different jurisdictions in the US where businesses may be required to collect and remit sales tax. On top of this, each of these jurisdictions can have its own sales tax rate, taxability rules, filing frequency, and filing deadlines.

The rise of e-commerce in recent years has added another layer of complexity, as international businesses may be required to collect sales tax in states where they have no physical presence, depending on various factors such as economic nexus laws.

Our team of experts is equipped to guide you through that maze of sales tax jurisdictions and ensure sales tax compliance is done accurately and on time.

 

 

Sales tax audit

Penalties and Audits

Operating without proper registration or incorrectly handling sales tax exposes you to hefty fines and potential audits. These can be time-consuming, expensive, and disrupt your business operations.

Penalties for non-compliance vary depending on the jurisdiction and the severity of the violation.

At the same time, audits can extend over weeks or even months, entailing significant legal fees and potential back taxes, adding financial strain.

Often businesses must allocate additional time and resources to accommodate the audit, incurring extra costs and diverting attention from core operations.

Our team of experts is here to fortify your compliance strategy and make sure that your business is free from penalties and audits.

Establishing Sales Tax Nexus

Creating a “sales tax nexus” in the US triggers registration requirements. Activities like storing inventory in a US warehouse, having salespeople travel through the country, or even participating in online marketplaces can surprisingly establish nexus.

These activities create a connection or presence (“nexus”) in a particular state, prompting the need for tax compliance in that jurisdiction.

Furthermore, the surge in e-commerce activity within the US has prompted states to reassess their nexus criteria. As a result, businesses need to stay vigilant and regularly monitor developments in nexus rules and regulations to ensure ongoing compliance with sales tax requirements.

Our sales tax experts stay current with the latest updates in nexus standards, ensuring ongoing compliance for your international business operations in the US.

 

 

 

USA sales tax meeting nexus

US sales and use tax services

Our Services

   Sales tax advisory and nexus determination: We guide you through US sales tax regulations and identify if your activities create a filing obligation.

    State-by-state sales tax registration: Our experts ensure you’re registered in the appropriate states to avoid penalties.

    Sales tax calculation, return filing and remittance: We automate calculations, prepare accurate filings, and remit taxes on your behalf, saving you time and resources.

    Ongoing support: Receive continuous assistance to fortify your compliance strategy and navigate potential audits with ease.

Benefits of our service

 

Avoid penalties and fines Ensure accurate tax compliance Save time and resources
Our expertise safeguards you from hefty non-compliance costs associated with US sales tax. Our services guarantee peace of mind with proper determination, meticulous calculations and on-time filings. We handle the complexities, freeing you to focus on core business activities and growth strategies.

Questions on your sales tax compliance?

REGISTRATION THRESHOLDS IN US STATES

 

STATE EFFECTIVE DATE ANNUAL ECONOMIC THRESHOLD ANNUAL TRANSACTION THRESHOLD
Alabama 01 October 2018 $ 250,000 N/A
Alaska 01 January 2020 $ 100,000 200
Arizona 30 September 2019 $ 100,000 N/A
Arkansas 01 July 2019 $ 100,000 200
California 01 April 2019 $ 500,000 N/A
Colorado 01 June 2019 $ 100,000 N/A
Connecticut 01 December 2018 $ 100,000 200
Florida 01 July 2021 $ 100,000 N/A
Georgia 01 January 2019 $ 100,000 200
Hawaii 01 July 2018 $ 100,000 200
Idaho 01 June 2019 $ 100,000 N/A
Illinois 01 October 2018 $ 100,000 200
Indiana 01 October 2018 $ 100,000 200
Iowa 01 January 2019 $ 100,000 N/A
Kansas 01 October 2018 $ 100,000 N/A
Kentucky 01 July 2018 $ 100,000 200
Louisiana 01 January 2019 $ 100,000 200
Maine 01 July 2018 $ 100,000 N/A
Maryland 01 October 2018 $ 100,000 200
Massachusetts 01 October 2017 $ 100,000 N/A
Michigan 01 October 2018 $ 100,000 200
Minnesota 01 October 2018 $ 100,000 200
Mississippi 01 September 2018 $ 250,000 N/A
Missouri 01 January 2023 $ 100,000 N/A
Montana
Nebraska 01 January 2019 $ 100,000 200
Nevada 01 October 2018 $ 100,000 200
New Hampshire
New Jersey 01 November 2018 $ 100,000 200
New Mexico 01 July 2019 $ 100,000 N/A
New York 21 June 2018 $ 500,000 100
North Carolina 01 November 2018 $ 100,000 200
North Dakota 01 January 2019 $ 100,000 N/A
Ohio 01 August 2019 $ 100,000 200
Oklahoma 01 July 2018 $ 100,000 N/A
Oregon
Pennsylvania 01 July 2018 $ 100,000 N/A
Rhode Island 07 July 2019 $ 100,000 200
South Carolina 01 November 2018 $ 100,000 N/A
South Dakota 21 June 2017 $ 100,000 N/A
Tennessee 01 October 2019 $ 100,000 N/A
Texas 01 October 2019 $ 500,000 N/A
Utah 01 January 2019 $ 100,000 200
Vermont 01 July 2018 $ 100,000 200
Virginia 01 July 2019 $ 100,000 200
Washington 01 October 2018 $ 100,000 N/A
Washington DC 01 January 2019 $ 100,000 200
West Virginia 01 January 2019 $ 100,000 200
Wisconsin 01 October 2018 $ 100,000 N/A
Wyoming 01 February 2019 $ 100,000 100

* Last updated – July 2023 (Source credit: taxconnex)

The above information is only indicative. This table is updated regularly but please contact GVC in order to ensure that it is correct at the date you are using it.

In need of US Sales tax services? We are here to help

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