When I was talking to the owner, the reason they gave me entrepreneurial and their personality and their personality There are many diverse.
They seek freedom of self -employed occupation, control over the future, leave their family’s legacy, or pushing their outstanding products to the public.
One thing that has never been included in the list is to deal with administrative troubles such as sales tax.
No one is willing to deal with this problem.
Collection, reporting and submission of sales tax declaration forms are one of the less interesting aspects of online sales products.
If you do not handle the sales tax, there will be confusion in each submission deadline. But it is not necessarily!
The sales tax introduction of the owner of the woocommerce shop will explain all the basic knowledge you need to understand. It will guide you to complete the five steps of the sales tax of American sellers, and let you consider some things before you reach the first tax deadline.
Let us dig in depth.
The first step: Determine where you have a sales tax relationship
US 45 45 United States 45 There are sales taxes for the State and Columbia SARs.
Different from federal income tax (in the United States, many people think of the word \”tax\” immediately), the sales tax is managed in the first level of the state.
This means that the sales tax law and regulations of each state will be slightly different.
This means that your first step is to determine you In which state is sales tax relationship
.
\”Nexus\” is just a strange way to express \”important existence\” in a state. Although there are many different types of activities that can trigger associations, in this article, we will discuss two most common: physical associations and economic connections. Define physical relationship
Even if you work on the table in the kitchen, your hometown will always be connected.
But other activities will also cause contact.
They may include:
The entity of a state exists , such as store, office or distribution center
Employees , contractor, sales personnel, installation personnel or other workers living there
The storage status Inventory inventory
Direct sales relationship of the state
] State third -party subsidiary
Temporary sales of a state , for example, at the trade exhibition or craft exhibition
[
123]
Your office -or employee’s office -may cause you to have a connection with a certain state.
You can find Links of each state and related laws . Similarly, the regulations of each state are different, so it is important to read these regulations with the expansion of the business.
Define economic relation The next common trigger factor. This is due to your concept of triggering sales tax liability in an economic activity in a state, whether or not you exist in the state. In the ruling of the Supreme Court in South Dakota, the relationship between this type has recently become legalized.
In this case, South Dakota argued that the state should be able to legally enforce e -commerce retailers Wayfair levied and paid sales tax in South Dakota, because the retailer violated South Dakota’s economic connection technique Essence Although some other states have included these laws in their books for some time, before making this milestone decision, there is no precedent for its law. It is a strange concept.
This means for the Woocommerce merchant that if you pass the state’s economic threshold set by the state’s total income and/or the state’s transaction quantity, then you have a contact. This means that you now need to register, collect and pay sales tax for the state.
Following the economic connection on the basis of the state may be proven to be complicated and challenging We created a tool in Taxjar’s friends to help you understand all of this. Taxjar sales and trading inspectors are a service that will check your WOOCOMERCE sales (and any other channels you sell) and tell you that you have exceeded its economic connection. For example, in the state of Minnesota, the economic threshold is $ 100,000 or more than 100 trades in the past 12 months. (Clarify that the amount of $ 100,000 refers to the sales of sales to Minnesota, not for your entire business.)
If your company’s sales in Minnesota are $ 200,000, and for you The company conducted a sales and transaction inspection, and we will immediately tell you that Minnesota is a state where you may have an economic connection.
immediately Start and Run sales and trading inspection device
to understand your position.
What does this mean? This is an important point:
If you are in contact in a certain state, you should plan to collect sales tax from any customer in the state
.
Unless you are fortunate to live In
One of the five states in the United States without paying the sales tax, you will always be in contact with the state, And you need to collect sales taxes from the buyers in your state.
But many shop owners only established sales tax relationships in their hometown at the beginning, and later expanded without being aware. Next, in each state registered permit you are in contact So you have determined that you have one or more states that have one or more states. connect.
Before you can collect the sales tax in the above way, you need to register in the state to collect the sales tax .
This is a vital step. Most states actually believe that it is illegal to levy sales tax without a sales tax license. In their opinion, if you do not have a license on behalf of your own state sales taxYou can simply put the extra money into the pocket.
The following is related
How to register the sales tax in each state some guidelines . You can register online (the fastest way, you usually get your sales tax license number on the same day), and even register with the Email and even personally go to the State Taxation Bureau.
Most states’ sales tax licenses are free, but some need to charge. Are you setting up? Start levying the sales tax
Once you get your sales tax license safely, You can start customers in related states you have affiliated states. The sales tax was charged
.
This may be a tricky process. Similarly, because the taxes and fees of the state level are different, you need to know how much fee is charged to each customer and tracks all the contents to report it. The following is some information about how to manually set taxes in Woocommerce. This also includes how to \”layered\” sales and local taxes.
If you want to automate the process and save some time, The Taxjar sales tax automation plug -in of the WOOOCOMMERCE can be
allow you to easily charge the appropriate amount from the customer from the customer sale tax.
You can
Find a instructions for setting up WOOCOMMERCE sales tax
. TAXJAR eliminates the complexity of collecting state tax.
I will discuss how to determine the sales tax rate in another article. Now, let’s continue to discuss what you need to do after you are ready to collect and sell after tax .
How much sales tax you charge
When you receive the sales tax license, the state government will also be for you The frequency of distribution sales tax declaration . This frequency is usually monthly, every quarter or every year, depending on the number of sales and sales tax levied in the state.
When your business tax declaration deadline is approaching, you need to calculate the amount of business tax collected in the state.
A few states make this simple. For them, you only need to determine how much sales tax you charge in the state and include it in your application.
But most states are not so simple .
They ask you to subdivide the sales tax levied by your level in the state and the county, city or other special tax jurisdictions.
In essence, the states allow you to work hard to break down the collected sales tax funds so that they can remit the money you remit into each judicial area in the state.
This may be very complicated. The owner may spend a few hours to check each transaction to determine which city, county or other regions of the transaction, and associate it with the tax list, and fill in the sales tax form.
This process is not only time -consuming, but also prone to errors. It also involves ing sales tax reports from each sales channel and trying to organize them into a huge electronic table. The average sales tax report and declaration takes an average of five hours, while complicated states such as California and New York take more time.
It is a better reason to use automated systems like Taxjar to collect your sales tax and prepare for you. The application requirements of some states are very complicated, such as California, which will increase the time you may need to spend in the application.
Submit the tax declaration form (on time)
Once you have completed the hard work of calculating how much sales tax is charged in your state, you You can log in to your state’s sales tax system to submit your sales tax declaration form or submit it through paper or telephone.
To remit the actual tax you charge, you can usually pay or mail check online.
This is a state list, which includes Submit sales tax declaration table and link to the deadline for sales tax declaration.
About sales tax declaration forms, there are some more moreImportant things need to be remembered:
The file \”zero\” returns. Even if you do not charge any sales tax, you must submit your sales tax declaration form before the deadline. Most states are required to do so, and the penalties that fail to submit may include the cancellation of your sales tax license to a fine.
Submitting on time, you may get discount.
About half of the state realized that the collection and sales tax will bring a burden on the merchant, and they will provide a small discount for submission and payment on time. This is a list of states that provide sales tax discounts .
After archiving, the process will start again. Welcome to the world of sales tax! With this, congratulations! You have reached the sales tax compliance. You have completed the setting and submission of the state sales tax … at least before the next deadline.
We hope that this introductory guide can help you understand the sales tax and have more confidence in this necessary administrative trouble.
It may not be fun, but it is an important part of setting up the Woocommerce store.
