![]() Legislation has already changed in about half the states based on this ruling. Based on this ruling, many states are now requiring businesses to collect and remit sales tax if the businesses have a certain number of transactions in the state and/or hit a specific sales total. RL: Before this ruling, sales tax nexus was based on where businesses had a physical presence. HC: What did internet sales tax look like before Wayfair vs. Wayfair, Inc.” On June 21, 2018, the Supreme Court ruled that remote sellers are not required to have a physical presence in a state to create sales tax nexus in the state. It’s based on a Supreme Court case called, “ South Dakota v. The most recent type of nexus is called economic nexus. ![]() HC: I think a lot of us have heard that a recent Supreme Court case (Wayfair) made big changes in sales tax. This may create sales tax nexus in additional states. Maybe you sell artwork at fairs or markets outside of your home state. Generally, you’ll have nexus in your home state, or where your office/gallery/studio/warehouse is located. You have nexus with a state if your business has some type of presence or connection to the state. If you have nexus, you are required to collect and remit sales tax. You want to establish where you have what’s called nexus. For example, the following five states don’t have a sales tax, while all others do: Alaska, New Hampshire, Delaware, Oregon and Montana. Therefore, sales tax varies state-by-state. So, states make their own sales tax laws and rules. Ok, now Rose, can we cover some sales tax basics? HC: I think it’s good for people to know that they really can just call the Department of Revenue to ask sales tax questions. You may even have a local office somewhere near you that you can visit. Also, don’t hesitate to call your state’s Department of Revenue to ask any sales tax related questions you may have. You can also look up sales tax training online and participate in online workshops and webinars to learn more. Read the class descriptions to see if sales tax is a covered topic. If you don’t have the resources available to do so, look for continuing education classes at your local community college that include accounting, bookkeeping, business and taxation. RL: It’s best that you speak with a CPA or an accountant to be certain you’re conforming to your state’s sales tax requirements and to determine where you may have sales tax nexus. What is the best way for a small-budget craftsperson or artist to get a handle on sales tax? ![]() Many of my clients are sole proprietors, doing everything on their own. HC: Rose, thank you so much for sharing your wisdom with us. Rose and I both work with clients all over the country, but we are both based in Asheville, NC, so that’s where we talked, and we used some local examples. So I called on accountant Rose Lulis to share some of her deep knowledge of sales tax. To find out what state licenses and permits are required, contact Business Link North Carolina (BLNC), an extension of the NC Department of Commerce at 91 or toll free in North Carolina 1-80.I’m an income tax specialist, but I often get questions about sales tax. For information concerning Wake County’s requirements related to your business, contact the Wake County Revenue Department at 91. If you plan to conduct business within the Raleigh City Limits, contact Revenue Services at 91 for more information. To find out what is required, contact the town(s) that you plan to operate in to see what their licensing requirements are. Depending on the size of your business, it may be best to consult with an attorney before getting started. Finally, there are state and federal income taxes, sales taxes and withholding taxes to consider. In most areas, there are zoning restrictions that may prevent you from operating a business from a particular location, including your home. Depending on the nature of your new business, federal, state, and local licenses and permits may be required.
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