Sales Tax Compliance July 2018

The Supreme Court’s sales tax decision: What to do. As reported here in July, the U.S. Supreme Court ruled that South Dakota (SD) could require out-of-state businesses to collect and pay sales tax to SD on sales in SD. This decision expanded its long-standing ruling that there must be a physical nexus in the state to include a virtual nexus with the state. But the decision does not open the way for all states to tax all out-of-state retailers on all online sales into that state. The court emphasized the importance of SD’s exemption for small sellers—under $100,000 in sales or 200 transactions into the state during the year—so that the SD law is not overly burdensome on small out of-state retailers, and the fact that the sales tax is not retroactive because such taxes become effective only after sales exceed one of the minimum thresholds. Finally, the court noted that SD is one of 23 states that belong to the Streamlined Sales Tax agreement that makes tax collection more uniform and simple, allowing retailers to avoid registering and filing returns with each state. Still to be determined: Does a state, such as California, need a much higher threshold to trigger the sales tax collection requirement than lightly populated SD? Must a state belong to the Streamlined Sales Tax agreement? What about localities with sales taxes in addition to state taxes? What to do: If your sales in a state meet SD minimums, check that state’s website regularly for new regs. For example, North Dakota, which has a law similar to SD’s, issued new rules immediately for out-of-state sellers who do not meet the small-seller exemption to register and collect sales taxes either by Oct. 1 or within 60 days after exceeding the small-seller exemption. Minnesota, however, is taking longer and will issue rules within 60 days. Check the 2018 Sales and Date compliance Guide by Avalara. See if you have sales into some of the 23 states that belong to the agreement. While some will adopt the SD mode, others plan narrower laws. One widely discussed alternative requires aggregation sites, such as Amazon, to collect and remit sales on behalf of small business sellers on their sites. Keep an eye on Congress, which had temporarily exempted online sales from state sales taxes but let that law expire. There is pressure for a law that sets uniform rules for sales tax collection.
If you are a small ecommerce seller, it is time to look into a complete solution and end the sale tax headache. With Avalara, sales tax can be done in just a few clicks.

Article resource: AIPB.org July 2018 newsletter

What is bookkeeping?

A Frequently asked question…. What is the difference between accounting and bookkeeping?  Well according to AccountingCoach.com

“The term bookkeeping means different things to different people:

  • Some people think that bookkeeping is the same as accounting. They assume that keeping a company’s books and preparing its financial statements and tax reports are all part of bookkeeping. Accountants do not share their view.
  • Others see bookkeeping as limited to recording transactions in journals or daybooks and then posting the amounts into accounts in ledgers. After the amounts are posted, the bookkeeping has ended and an accountant with a college degree takes over. The accountant will make adjusting entries and then prepare the financial statements and other reports.
  • The past distinctions between bookkeeping and accounting have become blurred with the use of computers and accounting software. For example, a person with little bookkeeping training can use the accounting software to record vendor invoices, prepare sales invoices, etc. and the software will update the accounts in the general ledger automatically. Once the format of the financial statements has been established, the software will be able to generate the financial statements with the click of a button.
  • At mid-size and larger corporations the term bookkeeping might be absent. Often corporations have accounting departments staffed with accounting clerks who process accounts payable, accounts receivable, payroll, etc. The accounting clerks will be supervised by one or more accountants.”

At EZ Bookkeep, your books will be done by someone who has the accounting educational background, experience, a certified professional bookkeeper and a certified Quickbook online proadvisor.  Bookkeeping might be viewed as data entry to some people, its actually much more than just data entry.  One must have a good understanding of accounting and bookkeeping concepts in order to “ENTER” the data correctly.  Bookkeeping is really the foundation of your business’s health.  With good and accurate record keeping, business owners will have a clearunderstanding of its business’s health which will help with financial decisions tremendously.  With your bookkeeping done right and up to date at all times, you will be providing your tax agent or CPA with the correct information to file your income tax correctly.  If you are a business owner and is currently doing your own bookkeeping, I highly recommend you outsource your bookkeeping to a pro.  It will free up your time so you can run your business and the cost of bookkeeping is fully tax deductible.