• Products
    • Sales Order Management
    • Inventory Management
    • Inventory and Demand Planning
    • Shipping & Fulfillment
    • Warehouse Management
    • Retail Accounting
    • Purchasing & Supplier Management
    • Workflow Automation
    • Reporting & Business Intelligence
    • Payments
    • CRM
    • POS
  • Services
    • Implementation
    • Training
    • Support
    • Customer Success
    • Service Tiers
  • Integrations
  • Who we serve
    • For Online Retailers
    • For Wholesalers
    • For Brands
    • For Multichannel
    • For Brick & Mortar Stores
    • BigCommerce
    • Magento
    • Shopify
    • Amazon
    • eBay
    • Walmart
  • Why Brightpearl
    • Why Brightpearl
    • Customer Stories
    • Our Partners
    • Pricing
  • Resources
    • Resource Center
    • Guides
    • Blog
    • Press
    • Hot Topics
  • Book a Demo
  • Login
The 2017 Retail Calendar: Key dates you need to think about as a retail business in 2017
January 5, 2017
Year In Review: 2016 Independent Retail Trends [Infographic]
January 12, 2017

Sales Tax Guide for Omnichannel Sellers

Published by Brightpearl on January 6, 2017

Selling your wares on multiple channels has become the new normal over the past several years and lots of ecommerce sellers are integrating Amazon, eBay, and other sales channels with their primary shopping cart. There are lots of benefits to becoming an omnichannel seller. After all, it’s a great way to boost your growth and expand into new audiences. But when you have multiple sales channels, back-end administration like sales tax compliance gets exponentially more complicated, too.

There are three major factors to account for:

  • Making sure you’re collecting the right amount of sales tax on all of your sales channels
  • Reporting how much sales tax you’ve collected on every platform
  • Breaking down how much you’ve collected by state, city county and other special taxing district in order to file sales tax correctly

Let’s dig into each of those three aspects that make omnichannel sales tax tricky:

 

Sales tax collection

You’ll need to make sure that each of your sales channels is collecting the right amount in each state where you’re required to collect sales taxes. The collection capabilities of various platforms can vary widely. Amazon has a powerful and user-friendly tax collection engine that can deal with complex sales tax regulations. On the other hand, eBay only allows one sales tax rate per state. The more channels you’re dealing with, the more opportunity you have for error when it comes to collecting the right amount of sales tax from your customers.

 

Sales tax reporting 

When you’re only dealing with one sales channel, it isn’t difficult to figure out how much sales tax you’ve collected from buyers in a given state as you’ll just run a report through that channel’s admin panel. But when you’re on multiple channels you’ll have to run multiple reports and then combine those reports together yourself for each state. What a headache!

 

Sales tax filing

Most states will want to see all your taxes collected for that state broken down by city, county, and sometimes by other special taxing districts. This can be a pain with just one sales channel, but with an omnichannel approach filling out sales tax filing forms can become extremely time consuming.

 

Pro Tips for Staying on Top of Omnichannel Sales Tax Compliance

Now that you have a better idea of the challenges, let’s take a look at a few tips that will make the sales tax process easier:

 

Periodically review your nexus states 

Ecommerce sellers are required to collect sales tax and file sales tax returns in states where they have “nexus”–a significant presence in a state such as an office, remote employee, or warehouse. As you add sales channels, you may find that you have nexus in more states that you originally planned. Many Amazon sellers are surprised by finding out they now have sales tax nexus in each state where Amazon stores their merchandise. To help figure this out, we’ve created a post to help determine the states where you may have sales tax nexus.

 

Make sure you’re collecting sales tax from all channels 

The biggest issue we see with omnichannel sellers and sales tax is when sellers forget to set up sales tax collection on one of their sales channels. It’s really easy to check though–TaxJar has an “Actual vs. Expected Sales Tax Due” report to help determine if this is the case, and if so it’s a simple process of elimination to figure out which channel has a box that didn’t get checked.

 

Setup automated sales tax reporting and filing

The easiest way to deal with the headache of omnichannel seller sales tax compliance is to automate your sales tax reporting and filing. A sales tax automation tool like TaxJar will connect all of your shopping carts and marketplaces to a central repository to calculate your sales tax reporting, then create return-ready reports for you to file in each required state. TaxJar even has the ability to AutoFile your sales tax returns for most states to completely eliminate the headaches that come with sales tax compliance.

 

Utilizing multiple channels can introduce more problems, but a solid system in place can reduce or eliminate a lot of the pain of sales tax compliance. To learn more about sales tax for online sellers, please check out our Sales Tax 101 for Online Sellers guide or start a conversation in the Sales Tax for Ecommerce Sellers Facebook group!

Get more content like this
direct to your inbox.

Share
0
Brightpearl
Brightpearl

Related posts

April 20, 2020

Understanding Landed Costs & The Profit Margin Formula


Read more
March 22, 2020

FIFO vs LIFO – Which is Best?


Read more
March 18, 2019

The Latest On Economic Nexus & How New Sales Tax Laws Affect You


Read more

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

brightpearl logo

Company

  • Brightpearl life
  • Our People
  • Perks & benefits
  • Opportunities
  • Press

Useful links

  • Help center
  • API

Partner Services

  • Find a partner
  • Become a partner
  • Refer a customer
  • Partner resources

Contact Us

  • +1-888-320-5069
  • +44(0) 117 981 7361
  • Get in touch
  • Contact support

Follow Us

  • Facebook
  • Twitter
  • LinkedIn
  • Youtube

© Brightpearl Copyright 2020 All rights reserved

Privacy policy T & Cs Security Terms 0f use
  • Sales Order Management
  • Inventory Management
  • Inventory and Demand Planning
  • Shipping & Fulfillment
  • Warehouse Management
  • Retail Accounting
  • Purchasing & Supplier Management
  • Workflow Automation
  • Reporting & Business Intelligence
  • Payments
  • CRM
  • POS
brightpearl order management icon

Sales Order Management

  • Manage multichannel orders in one system
  • Integrated POS, ecommerce, marketplaces, EDI, shipping and 3PL
  • Process thousands of orders daily
  • Integrate multi-warehouse fulfillment
brightpearl inventory planning icon

Inventory Management

  • Track inventory from purchase to sale
  • Automated inventory cost accounting
  • Make data-driven purchasing decisions
  • Gail real-time insight across multiple locations and sales channels
brightpearl inventory planning icon

Inventory and Demand Planning

  • Automatic forecast for replenishment
  • Invest in the right products
  • Release money tied up in overstock
  • Order enough product to meet demand
brightpearl shipping and fulfillment icon

Shipping & Fulfillment

  • Multi-location warehouse management
  • Manage complex order fulfillment
  • Automated shipping integrations
  • Configurable workflows
brightpearl warehouse management icon

Warehouse Management

  • Multi-location warehouse management
  • Intuitive barcode scanning system
  • Fewer mistakes on the pick / pack / ship process
  • Lower order handling time
brightpearl retail accounting icon

Retail Accounting

  • Automatically account for trading activity
  • Generate a P&L and balance sheet on demand
  • Real-time accounts payable & receivable
  • Expand through cross-border trade with multi-currency support
brightpearl purchasing and supplier icon

Purchasing & Supplier Management

  • Real-time accounts payable
  • Landed cost management
  • Manage relationships with suppliers
  • Update inventory costs using FIFO method
brightpearl workflow automation icon

Workflow Automation

  • Intuitive rule-based workflow automation
  • Automate your entire order-to-cash process
  • Minutes to set up and change
  • Save time on manual tasks and lower human error
brightpearl reporting icon

Reporting & Business Intelligence

  • Analyze sales and performance
  • Real-time accounts payable and receivable
  • Generate a P&L and balance sheet on demand
  • Define low-inventory quantities
brightpearl payments icon

Payments

  • Send click-to-pay invoices
  • B2B payment workflows
  • Take payment for phone orders
  • Save client card details for future use
brightpearl crm icon

CRM

  • Automate your email marketing
  • 360-degree view of customers
  • Wholesale CRM
  • Improve your customer service
brightpearl pos icon

POS

  • Save the sale when you don’t have an item in stock
  • Offline mode
  • Real time performance
  • Pause transactions

By Business Type

  • For Online Retailers
  • For Wholesalers
  • For Brands
  • For Multichannel
  • For Brick & Mortar Stores

By Ecommerce Channel

  • BigCommerce
  • Magento
  • Shopify
  • Amazon
  • eBay
  • Walmart