Avalara AvaTax Sales Tax Extensions for SAP Business One and Magento eCommerce
There was a time when ecommerce was a simple affair. These days, however, hungry states are looking for ways to increase revenue, and online sellers are directly in their line of sight. As federal and state governments turn their attention to capturing more revenue from Internet sales tax, many ecommerce businesses are finding themselves under increasing scrutiny, and they need to look at the impact sales tax may have on their business as they expand into more states. On a national basis, according to a US Census Bureau survey in 2012, as much as a third or more of state budgets are derived from sales tax, which helps state and local governments fund taxpayer services. Internet merchants should understand their responsibilities and liabilities as they do business not just in their own state, but other states or countries.
Every state has the right to define who has to collect sales tax, what those taxes are, and any exemptions that may be allowed. However, there are limits to how states can define “nexus.” Nexus means a “connection.” Ecommerce merchants must have a connection to a state in which a customer resides for the merchant to be liable for sales taxes. But states define nexus in different ways, and this makes it confusing.
Nexus triggering events can include:
- Traveling salespeople
- Agents or distributors
- Employees on payroll
- Trade show attendance
- Inventory / warehousing
- Servicing tangible personal property
Sales tax needs to be collected on numerous products and services across the country. The list of products and services may vary from state to state. For instance, in Florida, school items are not taxable during school holidays. In New York, clothing and apparel are only taxable when the cost meets certain dollar thresholds ($110). In California, digital software downloads are not taxable, but the same software bought in a box with a CD is taxable. Clothing and apparel, medical devices, digital media, software, and services are all examples of industries in which product taxability rules apply. These are just a few examples of the kinds of product taxability challenges that Internet merchants face.
Instead of manually setting up sales tax codes, Avalara AvaTax for SAP Business One automatically calculates taxes during your transactions in real time. This dramatically reduces the amount of time spent on complex compliance processing. AvaTax provides your business with a fully integrated and automated sales tax management solution, which includes functionality to protect against audits, obsolete data, and changing tax laws.
Avalara AvaTax provides automatic sales tax calculations within the cart. It provides the fastest, easiest, most accurate and affordable way to calculate sales tax within Magento; manage exemption certificates; file returns; and remit payments across multiple tax regions. Avalara AvaTax determines rates based on 100,000+ taxability rules in 11,000+ taxing jurisdictions and instantly applies them to each transaction within your Magento shopping cart.
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