Sales tax laws can be surprisingly complex—and noncompliance can lead to hefty penalties, interest, and even audits. Whether you operate a brick-and-mortar retail store, sell products online, or provide taxable services, understanding your sales tax obligations is critical.
At Aretera Corporation, we help businesses stay compliant, reduce risk, and simplify the sales tax process. Here’s what you need to know to stay ahead.
What Is Sales Tax and Who Needs to Collect It?
Sales tax is a state-level tax charged on the sale of goods—and in some states, services. Each state has its own rules for what’s taxable, what isn’t, and how much needs to be collected.
You may need to collect sales tax if:
- You sell physical goods (e.g., clothing, electronics, furniture)
- You provide taxable services (depending on state rules)
- You sell online or through a marketplace and meet economic nexus thresholds
Nexus means a significant connection to a state. This could be:
- A physical location (store, office, warehouse)
- Employees or sales reps in the state
- Reaching a sales or transaction threshold, usually $100,000 in sales or 200 transactions in that state
Not sure if you have nexus in a state? Our team can assess your exposure and help you register only where needed.
How Online Sales Have Changed the Game
In 2018, the Supreme Court ruling in South Dakota v. Wayfair changed how sales tax works for online sellers. Now, even if you don’t have a physical presence in a state, you may be required to collect sales tax if your sales volume exceeds that state’s threshold.
That means if you sell through Shopify, Amazon, Etsy, or your own site—you might have multi-state sales tax obligations.
We help e-commerce businesses determine their nexus footprint and automate multi-state filings.
Steps to Stay Sales Tax Compliant
Here’s what you need to do to stay on the right side of state regulations:
1. Determine Where You Have Nexus
Review your business activities to see which states require you to collect sales tax. This includes where you ship products, operate warehouses, or exceed economic thresholds.
2. Register for a Sales Tax Permit
Before collecting any sales tax, you must register with each state’s Department of Revenue. Collecting without a permit can lead to fines.
3. Collect the Right Amount
Each state—and even city or county—may have different tax rates. Be sure your POS system or online checkout calculates the correct rate for the buyer’s location.
4. File Sales Tax Returns
You must file regular sales tax returns, even if you didn’t collect any tax during the period. Filing frequencies (monthly, quarterly, annually) depend on your volume of sales in each state.
5. Keep Accurate Records
Maintain documentation of all taxable and non-taxable sales, exemption certificates, and your filings. These will be critical if you’re ever audited.
Common Sales Tax Mistakes to Avoid
❌ Collecting tax before registering for a permit
❌ Not updating tax rates regularly
❌ Failing to file “zero return” reports
❌ Ignoring new nexus rules after expanding sales online
❌ Mixing up product taxability (some items may be partially taxable)
Mistakes like these can be costly. That’s why many of our clients trust us to handle their sales tax setup and filings.
How We Help
At Aretera Corporation, we take the confusion out of sales tax compliance by:
✔️ Identifying which states require sales tax collection
✔️ Registering your business in those states
✔️ Configuring your accounting or e-commerce software for accurate collection
✔️ Filing returns on time—every time
✔️ Helping you respond to notices or audits
Stay Ahead of Sales Tax Requirements
Sales tax isn’t something you want to leave to chance. State laws are constantly evolving, and the risks of getting it wrong are high. Let us help you get compliant, stay compliant, and focus on what matters most—your business.
📞 Reach out to Aretera Corporation today to schedule a consultation and ensure your sales tax setup is solid.
Disclaimer:
The information provided in this article is for general informational purposes only and is not intended as professional advice. Our firm makes no guarantees about the accuracy or applicability of the information. For specific advice related to your situation, please contact us directly. We are not liable for any decisions made based on the content of this article.
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