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TaxJar: E-commerce Sales Tax Accounting

E-commerce harnesses the conveniences of technology and takes your business to potentially millions of customers nationwide or internationally.

Until 2018, most of e-commerce customers did not pay sales tax. That year, however, the U.S. Supreme Court changed things with its decision in South Dakota v. Wayfair. The court held that states could require retailers beyond their borders to collect sales taxes on residents of their states, even if the business does not have an office, employees or otherwise any physical presence in the customer’s state.

With sales taxes now applied to much of your e-commerce sales, you need accurate and experienced e-commerce sales tax accountants to ensure your customers pay and that you report the correct amount of sales tax.

How Do Sales Taxes Affect E-commerce Businesses?

Retailers across the board collect sales taxes from customers at the point of purchase. For brick-and-mortar businesses, the task is relatively simple. You generally have your state and local governments that impose taxes. Even then, different tax rates may apply based upon the type of merchandise or transaction. For instance, some states tax groceries, but at a lower rate than other products.

As an e-commerce entrepreneur, you have exponentially more jurisdictions and tax rates with which to contend. This can complicate and lengthen the time you spend on sales tax planning and preparation.

How Does Accounting Software Aid Sales Tax Accountants?

The Tax Jar and Quickbooks online integration ease the burdens of collecting and reporting sales taxes. Both applications capture data from PayPal, credit card, debit card and other forms of payment. With the accounting integration features, your sales through Amazon, Shopify and other e-commerce platforms automatically become part of your records.

Tax Jar is a unique website dedicated to the subject of sales tax. The application calculates sales taxes and aids with preparing sales tax returns tailored to specific jurisdictions. Integration with e-commerce and electronic payment services automates the entry of sales prices and calculation of jurisdiction-specific taxes.

Quickbooks online integration accounting also supports your firm’s sales tax responsibilities. As with Tax Jar, Quickbooks automatically computes sales tax for multiple jurisdictions by using the buyers’ address to determine the applicable tax rates. Users of Quickbooks Online can also activate or deactivate from sales tax calculations states, cities, and counties based on the preferences of the business.

How Does Quickbooks Online And Tax Jar Assist With Our CFO Advisory Services?

Using Quickbooks Online in conjunction with Tax Jar, we can provide comprehensive CFO advisory services to a wide range of businesses. The Quickbooks Online application compiles sales, expenses, and other data to prepare profit and loss statements and balance sheets. From this information, our e-commerce accountants can alert your business to potential financial problems, diagnose the causes, and propose solutions.

CFO advisory services also include tax planning and preparation utilizing both QBO and Tax Jar. Beyond sales tax returns, you need accurate data and calculations to file federal, state and local income tax returns and manage payroll. Quickbooks helps our accountants oversee your bookkeeping, alert you to ways to improve invoicing and expense documentation, and prepare business financial projections and budgets for your enterprise.

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This blog article is not intended to be the rendering of legal, accounting, tax advice or other professional services. Articles are based on current or proposed tax rules at the time they are written and older posts are not updated for tax rule changes. We expressly disclaim all liability in regard to actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive.