If you find it mindboggling to keep sales tax rates straight, you’re not
alone. There are more than 12,000 taxing jurisdictions throughout the United
States, according to tax software company, Avalara. Manually managing the rules
for small business owners is nearly impossible.
In a
2000 case, the U.S. Supreme Court found the existing tax structure too complex
to hold sellers accountable for collecting sales tax in states where they don’t
have a physical location. In response, Congress passed the Streamlined Sales
and Use Tax Agreement in 2005 in an effort to begin the arduous process of
creating consistency across the 50 states. The agreement’s four main aspects
tackle state-level administration, uniform tax base, simplified tax rates and
uniform sales sourcing rules.
Since
its inception, 24 states have passed legislation to align their sales tax laws
with the agreement. It is unclear, however, when the rest of the union will
follow suit.
Register
for our free webinar, Sales Tax
Basics for Small Business Owners, and receive the free e-book “Sales
and Use Tax For Dummies: Avalara Special Edition” to fearlessly face the
otherwise-overwhelming tax landscape.
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