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Designers should always ask themselves, “Am I selling more than $50k worth of goods or services in a state in which I am not registered?” If you answered yes to this question, it might be time to look at nexus thresholds for that particular location and multi-state sales tax.
Sales tax has become increasingly more challenging as selling across state lines has become more common. All states have different requirements and thresholds for reporting sales. Some states require that you file taxes if you sell $1 in their state, while other states have higher thresholds. Some states require that you charge sales tax on all services, while others don’t have any sales tax. Some states have varying district sales tax rates for multiple locations within their state. Some states require that you file income tax returns and pay state taxes if you sell in their state, along with remitting and filing sales tax. There are “home rule” states, states with one reporting entity, and states with multiple agencies collecting sales tax within that state. It’s enough to make anyone’s head spin.
State Sales Tax and How It Affects Your Business
While every state has its own set of requirements, the following 10 states are particularly complex: Arizona, California, Colorado, Florida, Illinois, Louisiana, Missouri, New York, Tennessee, and Texas.
Staying compliant can cost a lot of money. There are designers who simply choose not to take jobs outside of their area unless it is worth it. Here at Logistis for Designers, we try to make compliance as seamless as possible while still being affordable. We do not want our designers to have to forfeit jobs simply because of aggravating red tape.
With the help of our team of sales tax experts, we try to automate wherever possible.
Meet our sales tax expert Jordan!
“Hello! My name is Jordan and I handle all things sales tax at Logistis for Designers. From filing to advising and researching (including taking those obnoxiously long wait times to speak with your state’s Department of Revenue – FUN), I work to make sales tax as straightforward as possible! Trust me, sales tax law is ever-growing + changing, so I understand how tiresome it can become. Also, I am still extremely personable – given the amount of solitude I experience reviewing sales tax codes. LOL
When I am not researching sales tax codes + definitions, you’ll probably find me at Disney OR at home with my pups OR adding another plant to my *attempt* at mid-century interior designing. I love, love, love (did I mention love) Korean + Mexican food!
I’ve been handling some sort of accounting since my first job in high school, and nothing is more important to this field than honesty. Tax laws change all of the time, and with these changes comes transparency and a willingness to learn. I try my hardest to explain + answer any and all sales tax questions you have. Even if I do not know – which will happen – I will do my due diligence to get you the clearest answer!”
Jordan researches designers with projects in new areas and does his due diligence to help those designers stay compliant. We are also very excited that Avalara, the leading sales tax compliance automation software, will be launching its Accountant Partner Program this year. This release will allow us to streamline our sales tax (including multi-state sales tax) filings even more. We will also be able to access an exclusive research library which will enable us to get compliance information to our designers faster. The real kicker here is that Avalara also has on its roadmap the option to file local business licenses in this new platform, making it an even better tool to bypass compliance headaches.
At Logistis for Designers, we are constantly on the lookout for ways to improve our designers’ experience so that they can focus on what they love while we worry about the rest.
If you are trying to do this yourself, TaxJar can still be a great resource tool. Click here to look up your tax rates.