Many Amazon Sellers mistakenly believe that online sales are not subject to sales tax. When a product is sold online, sales taxes are due. Amazon sellers are responsible for paying sales tax to the states where they conduct business. States are increasingly losing money on eCommerce sales and have been auditing eCommerce sellers in an effort to collect taxes due. It is becoming more and more profitable for states to audit eCommerce sellers.
Avoid Annual Online Sales Tax Responsibilities:
Some Amazon sellers prefer to pay their online sales tax once a year, however, this can be an overwhelming process as you are required to pay the tax all at once. Many times, an online seller improperly manages their taxes, leaving this type of calculation to the last minute. The last thing any seller wants is to find themselves unprepared when the annual tax payment comes along. Having an automated online tax system spares the Seller the burden of keeping a manual oversight on all processed orders. The automated system will calculate and process all taxes, leaving a seller worry free when that annual tax payment comes along.
Avoid Wasting Time Manually Processing the Sales Tax of Each Claim:
While the process for filing sales tax may be simple in some states, it can be extremely burdensome in others. Sometimes states require a breakdown including the state, county, time and date of the sale. In addition, some states charge a tax on the shipping fee while others do not. Having an automated tax system keeps log of every transaction. Rather than requiring the seller to keep track of such differences in state law, an automated eCommerce tax software will regulate this for you.
Let an eCommerce Tax Software Determine the Nexus:
When a business has a physical presence in a state, it must collect state and local sales tax from its customers. This physical presence is referred to as the nexus. A nexus is defined differently by each state. An Amazon Seller may wonder whether an online business selling products into a state is liable for collecting tax on sales into the state. With the increasing growth of eCommerce, determining the physical presence of a sale can become extremely difficult. An automated eCommerce sales tax software determines the nexus by calculating the exact rate in compliance with the nexus of each purchase.
Allowing Your Business to Grow by Using an Automated eCommerce Software:
E-commerce software is comprised of sales tax modules which can accurately calculate sales tax during the checkout process. Manually calculating each sale may seem like a solution, but not for large sellers who deal in massive quantities. A business’ growth is severely limited if the owner has to manually track the sales tax for each purchase. Alternatively, eCommerce tax software spares the business owner the hassle of hiring somebody to do these calculations for them. Using an automated system provides an Amazon seller with the opportunity to grow as they can use that time beneficially to enhance other areas of their business.
Use Automated eCommerce Sales Tax to Avoid Tax Evasion Penalties
Tax evasion is a misdemeanor and can potentially become a felony if the amount exceeds a certain state law limitation. Most states classify tax evasion as a felony when the unpaid taxes exceed $10,000. This usually results in a fine but can potentially result in jail time. Sellers can avoid the penalties associated with online sales tax by using an automated system to ensure they are up to date and in full compliance with their sales taxes.
Amazon Sellers’ Lawyer Conclusion:
Sellers should look into purchasing an automated eCommerce tax software as it will save them time, allow their volume of sales to grow without limitation, and ensure all taxes are paid and in compliance with the nexus of each purchase. The last thing any seller wants is to be audited by the State and liable for tax evasion penalties. In a time where states have been increasingly auditing Amazon Sellers, it is extremely important to ensure sellers are handling their online sales taxes properly.
