Plain and Simple: Bright Business Insights Fall 2018 | Page 8

THE WEEDS ARE NO PLACE FOR A BUSINESS OWNER WAYFAIR RULING PROMPTS IMPORTANT TAX QUESTIONS Client Advisory Services Will Reveal Opportunities for Growth Maintaining solid accounting strategies is necessary for the growth and financial well-being of any business, but that doesn’t mean you should be crunching and scrutinizing the numbers yourself. But depending on the size of your operation, it might not make sense to hire a team to support a full-fledged finance department or even a part-time, in-house The Data You Want And Need, Without The Overhead Client advisory services (CAS) has emerged as a solution for those who are looking for ways to collect and gain access to vital financial data without taking on additional personnel expenses or getting “stuck Online Sales Bring State and Local Tax Issues Do you conduct business online? Even if it’s only a few sales, every the economic nexus rules with the thresholds mentioned below. At transaction you make online could be subject to sales tax. That’s right, the time of writing this article, 28 states have implemented these every state in which you do business can now come to you in search of new nexus rules. the money they are rightly owed. But that’s just the tip of the iceberg. In The Consequences in the weeds” themselves. the United States, each state has its own set of rules with regard to sales current financial information any less important. On the contrary. All A service for business owners looking for cost-effective accounting how sales are sourced and even defined. consequences, which means that if you do any business online or in companies, especially those in growth mode, have unique financial solutions tailored to meet specific needs while delivering optimal needs; and failure to maintain and effectively utilize financial data can results, CAS gives business owners access to an external accounting With different rules for each state, managing online sales can get more tax regulations. Owners who don’t follow the necessary steps to charge, spell disaster over time. department fully capable of: than a little complicated. Therefore, if you do any type of business As an owner, you should spend your time looking at the bigger picture • Reconciling bank statements Wayfair ruling is a great place to start. and determining the company’s general strategic direction in the • Payroll management months and years ahead. In other words, it’s your job to work on your • Closing month-end finances An Overview business – not in your business. • Managing your general ledger The Wayfair ruling applies to all businesses that sell into other states customers, more often than not, this penalty is more likely to fall that hit certain sales and/or transaction thresholds: squarely on the seller. As a result, your business could face extreme accountant for that matter. However that doesn’t make the need for CAS utilizes cloud-based software solutions to ensure that your financial information is readily available and printable in a variety of taxes and use tax rates. Additionally, states have their own systems for online, learning more about sales tax and the recent South Dakota v. • • the information and data you need to be successful. The underlining objective of CAS is to provide you with expert insights and reports that are meaningful to you while providing you with data that’s easy to understand and takes industry trends into consideration. Your CAS team will work to deliver excellent service and ensure that the proper controls are in place to mitigate risk. For example, when you • The transaction threshold in most states is 200 in a 12-month of time. • The sale source – This is where a consumer first took possession The item must be taxed – Almost every tangible item sold will have a sales tax. But some are exempt, such as food sold at supermarkets. • Interest penalties – Usually overlooked by business owners, interest penalties can add up quickly. With interest on your back taxes, this can actually add an additional 20 percent to the amount already owed. • Expanded penalties – Even though your issue may only be with sales tax, the penalties levied by the state could be put on your income, franchise or gross receipts tax. At that point, you could find yourself responsible for back taxes and penalties in each of these areas. Doing business online has certain tax-related ramifications that many Seller must have nexus with that state – A business must have significant connection to a state to legitimize the sales tax on items business for yourself in the first place. sold. Yes, a business always has nexus in its home state, but nexus can be established in other ways. The Wayfair ruling did overturn the physical presence regulation and several states have adopted this service can help you build a stronger, more profitable business for generations to come. by: Heather McNichols Director of Accounting Services 122 Fourth St. NW P.O. Box 1020 New Philadelphia, OH 44663 330.308. 6880 [email protected] hardship, especially if back taxes are owed for an extended period The sales threshold in most states is $100,000 in a 12-month of a product in that state. • Back taxes – As the seller, you are likely to be held responsible for back taxes. While it might be possible to collect these from peace of mind and allows you to focus on the reasons you went into love to talk to you about the solutions available through CAS and how • consumers in states when certain conditions are met: will get paid or if your payroll will be completed on time if a family Would you like to learn more about CAS? Give me a call! I would consequences: Furthermore, sales taxes must be collected on products that are sold to utilize this service, you no longer have to worry about how your bills emergency keeps an employee from coming into work. CAS delivers collect and settle taxes with each tax state could face the following period. reports that are meaningful to you and your business’s specific goals, your financial advisors will work closely with you to ensure you receive other states, you now need to understand and comply with additional period. formats. Moreover, because the financial reporting is unique to your business, and because your success depends on receiving accounting As you can imagine, not paying sales tax can result in harsh by: Scott Zielaskiewicz Indirect Tax Manager 694 E. Washington St. P.O. Box 485 Medina, OH 44258 330.661.0220 [email protected] business owners overlook. Without the knowledge of specific state and local tax issues, harsh penalties could sink your business. Give me a call to learn more about the Wayfair ruling, and how you can protect