|EcommerceBytes-NewsFlash, Number 3096 - June 27, 2013 - ISSN 1539-5065 3 of 5|
There's been a lot of discussion about how federal sales-tax legislation affects online sellers in recent years, especially now that the Senate passed the Marketplace Fairness Act. A company called TaxJar promises to "take the pain out of filing sales tax," and is targeting sellers on Etsy, eBay, Amazon, Storenvy - or any seller that use PayPal to process their payment transactions.
Sellers already have an obligation to collect sales tax in states where they have a physical presence. As sellers increasingly use fulfillment services where they store their products in out-of-state warehouses, their tax obligations expand accordingly. For those sellers, sales tax remittance is already a daunting task, one likely to get more burdensome with the passage of federal legislation.
TaxJar officially launched its online sales-tax management tool this month. It connects its clients' accounts with online marketplaces and payment services to automate and track many of the tasks associated with collecting and remitting the tax to states owed.
TaxJar says collecting sales tax from buyers is the easy part - the hard part is:
The company also explains that most states require years of transaction history - "we help you stay compliant in case of an audit."
In conjunction with its official launch, TaxJar also introduced a new feature: Local reports by tax jurisdiction. "No more manual work to break sales tax down by counties and cities." The company says sellers who have to go through every sale to determine which tax jurisdiction the sale belongs to can spend hours or even days to calculate the amount owed to each locale.
For example, a seller required to file a return to the state of Ohio is forced to calculate sales for each of the state's 88 counties. "TaxJar has done extensive research to provide educational content so that customers don't have to sift through state websites or wait endlessly on the phone to talk to budget-depleted support staff for information about nexus, rates, and help filing out forms."
A company spokesperson tried to relay to EcommerceBytes the complexity of state and local sales tax laws on online merchants. "With all the talking heads and misinformation out there about internet sales tax, the Marketplace Fairness Act, and such, we're really trying to help sellers get through this stuff. To give you a sense of what we're attempting, in addition to building them a software solution, check out some of our posts to help sellers better understand the complexity facing them." He provided a link to a blog post about local sales tax in Pennsylvania and a link to a blog post about sales tax in Arizona titled, "Why Business Owners Trying to Do the Right Thing Still Can't Get Sales Tax Correct".
TaxJar also plans to allow users to file their sales tax returns directly to states within the product. TaxJar has a 30-day free trial, and costs $9.95 a month. More information is available on the TaxJar website.
New Hampshire Senators Try to Protect Online Sellers in Their State - May 20, 2014
Avalara Offers Sales Tax Solution for Small Sellers, FBA Merchants - April 23, 2014
Shoppers Scale Back when Amazon Collects Sales Tax - April 23, 2014
Sales Tax Solution for Online Merchants Gets Angel Funding - March 13, 2014
TaxJar Integrates Sales-Tax Tracker with Etsy Marketplace - February 11, 2014
About the author:
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to firstname.lastname@example.org.
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