Basic Things You Need To Know
So you want to start your very own online business. Aside from having unlimited access to the Internet, you also need to be armed with adequate knowledge about taxes and your online business because without it, you will surely be at a loss.
Online retailers, or more commonly known as e-commerce are not exempted from paying taxes, contrary to the common misconception of most people. E- commerce’s are still included in the rush for meeting the April 15 deadline for tax filings.
However, veteran e- commerce would say that the most difficult part for online business owners is navigating and complying with the confusing and complicated laws and conditions governing day to day sales taxes.
An Everyday Challenge If you are one e- commerce who would like to take your online business seriously, then you should be prepared to deal with the fact that handling and managing sales taxes is actually an everyday challenge.
The truth is, a lot of e- commerce are required by the government or their state to file and remit sales tax to states on either a monthly or regular interval. The basis for the filing of sales taxes would more or less depend on how much revenue you online business generates.
Few Tips for E- commerce
It is very vital that you understand your responsibility for sales tax. You must also know that the idea that e-commerce companies are required to collect and remit sales tax in every state is one big myth.
You only have to pay sales tax if you have nexus in that certain state. If you are a neophyte in online business, perhaps you don’t have an idea what the word nexus means, right?
Well, in online business jargon, nexus means a “connection”. Put in application, making a sale in another state does not mean that you automatically have a sales tax obligation.
You have to put in mind that there are many rules and laws that you need to consider before you can determine whether or not you will need to pay for sales tax in a certain state.
When you create your very own nexus in a certain state, you are then required to calculate, collect, report and remit the sales that you make in that certain state every time you have a transaction there.
This is the reason why you are obliged to pay tax sales based on the location of your business.
However, you must also keep in mind that there are also other ways to create your very own nexus in a state. Aside from physical presence or structure of your business establishment in a certain state, you can also establish a nexus by having sales representatives present in that state, trade shows, mobile stores, etc.
Trying to make an online business work amidst the seemingly confusing and complicated rules that apply to different states can be quite impossible.
However, one must not lose hope; with the help of professionals in the legal field and certified public accountants, you will surely be enlightened as to what steps you should take for your online business to stabilize and prosper. By being armed with the right knowledge about taxes and your online business will surely help you achieve success in the realm of online businesses.