Florida Tax Nexus for AliExpress Dropshipping Bookkeeping

What Is State Tax Nexus? Online Sales Tax Explained

State tax nexus is an important issue for businesses that have employees and conduct business in multiple states. In this article, we will discuss what state tax nexus is and how to determine if your company has tax nexus in a state.

What is State Tax Nexus?

State tax nexus is the relationship between a taxing authority and a business. A business must have tax nexus before it can be taxed. There are a couple of different types of thresholds to establishing tax nexus, but the basic idea is that you must have a prominent presence in a state.

How to Determine if Your Company Has Tax Nexus in a State:

There are a couple of ways to check and see if your company has tax nexus in a state:

1. Check if you have a state registration to do business in a given state: This is the simplest way to determine if you have tax nexus in a state. When you start conducting business in a state, you typically have to register. If you have a state registration to do business in a given state, then you have tax nexus in that state.

2. Evaluate whether you have employees or assets or property in a state: Anyone who is working in a state can trigger tax nexus. If you have employees working in a state, then you are triggering tax nexus in that state. If you have a W2 employee working in a state and that employee is renting office space, then you are definitely triggering tax nexus in that state. It is a little tougher to determine if there are just small amounts of assets in a state.

3. Determine if you are conducting business over the internet: A few years ago, the Supreme Court ruled in favor of South Dakota in the Wayfair versus South Dakota case, which gave states the ability to tax businesses even if they didn't have a physical presence in the state. If you are conducting business over the internet, such as ecommerce sales, software sales, or service sales, and you pass a certain threshold (usually around $100,000), then you may have triggered tax nexus in that state.

Determining if your company has tax nexus in a state can be complicated, but it is important to do so in order to avoid any potential tax liabilities. Kruze Consulting can help you determine if you have tax nexus in a state and take care of all the forms you need to file.

Understanding Sales Taxes For Your Shopify Business

Hey guys, it's Chris Rivera, aka The Ecom Accountant. Today, we're going to talk about sales taxes, a topic that has been flooding our inboxes. We want to make sure that you understand how sales taxes affect your business. In this video, we'll cover the basics of sales taxes, where you need to comply, and what your risks are.

Here's what we'll cover in this article:

- Understanding the importance of sales taxes for your business.

Topic 1: What are sales taxes?

- Defining sales taxes and providing a simple example.

- Understanding how sales taxes work for physical locations.

Topic 2: Where do I need to comply with sales taxes?

- Exploring physical and economic nexus.

- Understanding the key indicators of economic nexus.

- Simplifying the rules for compliance across different states.

Topic 3: Understanding the screenshot notifications from Shopify.

- Reviewing the live versions of Shopify accounts.

- Understanding the risk levels associated with economic nexus.

Topic 4: What's your risk?

- Focusing on physical presence and economic nexus.

- Understanding the sales volume and transaction thresholds.

- Identifying the risk level based on your annual sales.

- Providing honest advice on when to focus on compliance.

- Recommending working with a professional to stay sales tax compliant.

Overall, sales taxes can be a confusing topic for many e-commerce entrepreneurs. However, it's important to understand the basics of sales taxes, where you need to comply, and what your risks are. By focusing on physical presence and economic nexus, you can determine where to focus your compliance efforts. We recommend working with a professional to ensure that you stay compliant with sales tax laws.

Dropshipping Taxes | Full Guide On How To Run Your eCommerce Venture Legally 💼

- Taxes can be intimidating for business owners, but they are necessary.

- Many people avoid e-commerce because they don't know how to pay taxes.

- This article will simplify the tax process for e-commerce business owners.

Types of Taxes:

- Income tax: depends on where you live and how much you make.

- Sales tax: charged on your selling channel, collected from customers and paid to the government.

- Source tax: paid to suppliers when purchasing products, added to source price and break-even.

- Customs duty tax: paid when importing and exporting goods, varies by country.

Avoiding Taxes:

- Tax-exempt status: speak to suppliers about necessary documentation.

- Income tax exempt: available in certain states in the US.

- Taxes are unavoidable, but understanding them can make them less intimidating.

- Speak to a local accountant for more specific information on taxes in your country.

- Join Autodesk's mentorship program for one-on-one help with your e-commerce business.

Everything You Need to Know About Sales Tax for Dropshipping

- Christine from Ledger Crews discusses sales tax for drop shippers and sellers

- Explains the three parties involved in drop shipping

- Will use a whiteboard to make it easy to understand

Part 1: Three Parties Involved

- Customer places order with seller

- Seller uses drop shipper to order products

- Drop shipper delivers product to customer

- Customer only deals with seller

- Example of drop shipping scenario

Part 2: Nexus for Seller and Drop Shipper

- Seller has physical presence in home state

- Economic nexus determined by customers in other states

- Drop shipper has physical presence where warehouse is located or through delivery vehicle

- Drop shipper has economic nexus where customers are creating it

Part 3: Sales Tax

- Seller charges sales tax where they have physical or economic nexus

- Drop shipper charges sales tax to seller where they have physical or economic nexus, unless seller provides resale certificate

- Resale certificate can be obtained through MTC or SST form

- Chart out your own scenario to determine where you have physical and economic nexus

- Register for Ledger Crews' sales tax master class for more information

- Ledger Crews is hiring for accounting and bookkeeping positions.

Collecting Sales Tax in Shopify | Out of State Requirements

Collecting sales tax in Shopify can be confusing for many people. Some of the common questions that arise include whether Shopify has a setting for collecting sales tax, whether sales tax should be collected from every state, and whether one should collect sales tax in their own state from day one. In this video, we will address these questions and provide insights to help you collect sales tax in the correct way.

Key points:

1. Shopify does have a setting to immediately collect sales tax from customers when they make a purchase.

2. It is important to check your settings to ensure they are correct.

3. You should collect sales tax in your own state from day one, unless you live in Delaware, New Hampshire, Montana, or Oregon.

4. You need to collect sales tax from customers and states where you have a tax nexus.

5. The tax nexus is based on the number of sales and dollar amount of sales.

6. Each state has different thresholds for when you need to start collecting sales tax.

7. You can use a website to assess which states you need to collect sales tax in.

Collecting sales tax in Shopify can be a complex process, but it is important to do it correctly to avoid getting audited. By following the guidelines outlined in this video and consulting with your accountant, you can ensure that you are collecting sales tax in the correct way.

Shopify sales tax setup for stress-free compliance | Walk-through guide

Hi Shopify sellers! This is Kexin from LedgerGurus. Today, I'm going to discuss sales tax settings in your Shopify store and how to ensure that you're compliant with sales tax regulations.

Sales Tax and Shopify:

- Shopify is not a marketplace facilitator like Amazon or Etsy.

- Every sale that goes through Shopify is your responsibility to collect and remit sales tax.

- You must turn on the sales tax settings yourself.

Setting Up Sales Tax in Shopify:

1. Enter the places where you want Shopify to collect sales tax.

2. Check the box to automatically calculate tax on shipping and add tax overrides for shipping in states that do not tax shipping.

3. Ensure that all taxable products are collecting sales tax.

4. Add all locations of your warehouses for origin/destination sourcing purposes.

5. Exempt customers who are exempt entities or wholesalers who will resell your products.

Setting up sales tax in your Shopify store may seem like another admin task, but it's crucial to ensure compliance with sales tax regulations. Follow these five steps to set up your sales tax settings correctly and avoid paying out of your pocket. Don't hesitate to leave a comment if you have any questions. Please like and share this video with your fellow Shopify users!