eCommerce vendors must now collect sales tax online, for the majority of states, as well as the District of Columbia. The Supreme Court of the United States ruled on June 21, 2018 that a physical presence in a state was no longer necessary for the state to charge a business sales tax. This ruling overturned the previous law of “nexus” mandated by Quill Corp v. North Dakota (1992) which used a physical presence as the prerequisite for tax liability.
Most states have taken action in response to the ruling in South Dakota v. Wayfair, Inc. (2018) and many more are likely to do so in the coming months. Some states already had their new requirements ready in preparation for the ruling. Do I need to charge sales tax on my website? Different states have different requirements and some have no requirements as of yet, but most likely online vendors will now be subject to sales tax.
The Rules in Mississippi
eCommerce sales tax rules in Mississippi changed on September 1, 2018. From that date on, online vendors who meet both of two requirements must collect sales tax online. First, the vendor must do $250,000 in business in the state of Mississippi AND must systematically exploit the market in the state. Systematic exploitation refers to advertising, whether television, radio, email, newspaper, magazine or other forms directed at Mississippi customers.
These rules are for Mississippi and do not reflect the standards of other states, many of which do not have online sales tax rules. Vendors must be aware of the individual requirements in each state in which they sell.
Put Avalara to Work for You
Compliance can be one of the largest hindrances to making a healthy profit. Labor hours and money can seem to go down the drain while the fast-moving business world passes you by.
When you keep your records by hand, you run the risk of human error. When there are thousands of tax jurisdictions, each with its own regulations, you compound the probability of error until it is almost a certainty. Mississippi online sales tax rules differ from other states. In addition, any municipality in Mississippi is free to determine its own rules for how and when to collect sales tax online. Any mistake is subject to harsh penalties during audits.
Automation is the only viable solution to this quagmire. With computers streamlining the process, operations costs are minimized and labor hours spent heeding compliance are reduced. Forix partner, Avalara, is the company that over 20,000 others have turned to for their online sales tax needs.
Avalara’s software is specially designed to integrate with your company with no fuss. It automates the record keeping process and eliminates paperwork. Covering over 12,000 tax jurisdictions around the world, and millions of goods and services, Avalara makes the right decision on time, every time.
Avalara automates the entire process, too. Gathering data, filling out forms, and handling remittances are all the benefits you get when you automate with Avalara. It also keeps track of all exemption certificates.
Disclaimer: The information in this blog post is provided for general informational purposes only and should not be construed as legal advice from Forix or Avalara.