Partnership with AvaTax Relieves Sales Tax Headache

Along with all the monumental stressors of 2020 came a fairly significant change to the nexus rules that dictate when print companies have to charge sales tax. And if you haven’t yet adapted your Print MIS to help analyze and track your liability, now is definitely the time.

First, a quick overview of the legal case: In 2018, the Supreme Court sided with South Dakota (South Dakota v. Wayfair), ruling that South Dakota was able to require collection of sales tax for companies selling products or services to customers in that state, even if the business did not have a physical presence in South Dakota.

It was a landmark ruling that prompted most states to follow suit with a similar standard. That means, as of Jan. 1, 2020, 43 of the 45 states with a state sales tax have imposed remote seller legislations, whereby any company that sells and delivers tangible products – including printed materials – and in some cases services, must register with the state and collect and remit the appropriate state sales tax.

While the thresholds vary state-to-state, the most common thresholds are 200 transactions or $100,000; meaning that you’ll be responsible for registering and remitting sales tax payments to the state once you’ve hit either threshold (typically over the prior 12-month period).

To be clear, you are still responsible for sales tax where you have a physical presence (office, warehouse, employees, etc.); but now also where you have an economic presence from selling or delivering products. It also can apply to direct mail shipped to multiple states, though some states exempt promotional materials.

Print shops must investigate each state where they send direct mail to determine their sales tax liability based on the state-by-state economic nexus laws.

Does all of this make your head hurt? If so, let me reassure you that the Avanti Slingshot Print MIS can make this complex task a lot easier. We have partnered with Avalara to integrate its automated sales tax software, AvaTax, into the Slingshot accounting module.

In a nutshell, here’s how it works:

• AvaTax links directly to the MIS through a prebuilt connection that allows seamless communication – usually without IT support needed for setup.
• It collects transaction data from the MIS and calculates the tax total. This amount is visible to customers and salespeople in real-time, so there are no surprises.
• AvaTax stays on top of changing rates and rules in more than 12,000 tax jurisdictions so you don’t have to track this information.
• It saves time and reduces calculation errors, so you get the numbers right the first time.
• When it’s time for filing taxes, just pull your transaction data from AvaTax to prepare your returns.

If you think your tax liability makes you a likely candidate for multiple state taxes, please talk with our Avanti product specialists about this important service. They can provide a free demo to show you how AvaTax might make your job easier. Also, don’t miss our free, on-demand webinar, Demystifying Sales and Use Tax Compliance for the Printing Industry.