With over 10,000 jurisdictions that levy sales and use taxes in the United States -- 14,500 if you include special-purpose tax districts -- big and small retail clients alike may not be aware of their tax obligations, especially if they sell goods online.
To help you guide your clients, here’s an overview of nine areas most likely to pose sales tax compliance risk:
1. Brand New Compliance Requirements – Each year, entirely new sales tax requirements or exemptions are enacted, and a sheer lack of awareness due to the newness of tax policies can lead to sales tax compliance risk. These can relate to changes in tax rates, taxation amounts, product taxation, tax boundaries, exemptions or the application of amended or newly enacted (and controversial) sales tax laws.
It’s important to assist clients with keeping track of the new compliance regulations going live each quarter, as well as significant court cases and federal sales tax bills that can have sales tax implications. For example, there are currently four pieces of federal sales tax legislation being considered that would have significant impacts on sales tax policies across the country.