Multichannel Tax Compliance for Growing eCommerce Brands
Following the Tax Rules as a Multichannel Seller originally aired live on Tuesday, August 10, 2021. Information provided was up to date as of that date.
It’s difficult to have a conversation about eCommerce without addressing the effects of COVID-19. Though the world is beginning to open back up, eCommerce as an industry continues to grow. In fact, 62% of consumers are purchasing more online now.
As your business grows, so do your tax obligations. Reaching a certain level of sales can trigger sales tax nexus in a variety of states, even without warehouses or inventory in those states. 44 of the 45 states with sales tax have adopted economic nexus, and these states’ rules all vary.
Keep in mind that being a multichannel seller doesn’t just extend to selling on Walmart, Amazon, and your own website. This also includes selling internationally, with the whole world of tax laws to which you need to adhere.
The tax experts at Avalara have shared four tax compliance challenges they often see with their eCommerce clients:
- Product Taxability – Yes, different categories of products have different tax rules. For example, a sliced bagel is considered “prepared food” and is taxed differently than an unsliced bagel.
- Geographic Tax Rates – Different states, counties, cities, etc. have different sales tax percentages, which can become confusing.
- Multiple Channels – The focus here is to differentiate between sales channels and distribution channels.
- B2B Exempt Sales – Business expenses can sometimes be tax-free but how can you be sure something qualifies?
Resources from the Webinar
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Caroline Powell is the Marketing and Events Coordinator at Seller Labs. She is an experienced and organized Marketing Coordinator focused in virtual and in-person events, email marketing, and project management. Managing events from creation to completion, she has experience in marketing campaigns, advertising, blog writing, directing a team, and ensuring the events' success through nurture endeavors.