Automated Sales Tax Compliance for Your eCommerce Site
Registration, tax return filing and support for your web sales across the United States.
- Ongoing tax monitoring and filing
- Your own dedicated tax manager
- Custom sales tax calculation at checkout
- Connect your site to our platform (Java, PHP, WordPress & Webflow)
4 Steps to Make Your eCommerce Website Compliant for sales tax across the US
1. Understand How It Impacts Your Business
Registering for sales tax and charging your US customers tax will have a significant impact on your business. It is important to know your legal obligations and the commercial implications of tax compliance. The software can help automate the process, but there are various practical issues to understand:
- What are my legal obligations and risks if I don’t get it right?
- Could I structure my business more efficiently to minimise tax exposure?
- How will charging sales tax impact my business commercially?
- What if state tax offices ask questions or audit me?
- What does it mean if I sell via other channels?
2. Register for a Sales Tax Permit
If customers in multiple US states buy from your eCommerce store, you might be legally obligated to get a sales tax permit in those states. You will need to understand your Nexus obligations to determine where you have to register for tax.
You then need to apply with the relevant state for a sales tax permit. Each state has their own registration process, but it will generally involve completing a detailed registration form and providing supporting documentation about your business, supply chain and products.
3. Set Up Sales Tax Collection On Your Shopping Cart & Start Collecting
Once registered for sales tax in a state, you must start charging sales tax on eligible sales made to that state. We simplify this process by helping you configure your store to ensure the relevant tax will be added to your sales at checkout.
4. Report, File & Pay Sales Tax in all states
You will have to file a monthly or quarterly return to every state where you are registered, where you report all the sales you made to their state. The tax returns are filed electronically using the relevant state tax office’s filing portal – they must be submitted before the specific deadline, and you have to remit the tax you have collected.
The tax returns are very complicated because transactions must be reported at a jurisdictional level, and sometimes by product. You need to factor in discounts, refunds and ‘sales tax holidays‘ and ensure the exact amounts are reported in the correct boxes – or you risk severe penalties.
How Yonda Can Help Collect, File & Pay Sales Tax on your website
It’s hard enough to run a successful online business without having to worry about sales tax in 50 states. Yonda simplifies the Sales Tax process.
We can specifically help you with:
Integration with your webstore
Our simple REST API makes connecting your website to our platform easy. Once integrated, we will regularly import your transactions when we need them for filing returns or nexus analysis. You only need to do this once: your website will be connected with Yonda.
Assistance with Setting Up Sales Tax Collection at checkout
You’ll need to add the correct amount of tax to your sales prices at checkout, depending on your products and the shipping address. To set this up, you’ll need access to a rates database – connect to Yonda to automate sales tax at checkout.
Sales Tax Registration
Based on your nexus obligations, Yonda Tax will register your business directly with all states where you require a sale tax permit. You simply complete a simple questionnaire and we take care of the rest. It’s as easy as that!
Automated Sales Tax Return Filing
At the end of every month, you need to send Yonda your sales tax so we can check everything is in order and file your sales tax returns on time. This can be done manually by uploading a sales report from your website into our secure platform, but it is much easier to set up an automatic upload via API Integration.
Complimentary Nexus Analysis
Send us a sales report from your website or accounting system and we’ll do the analysis to determine where you might have triggered or are approaching economic nexus.
Economic nexus refers to states where your sales have exceeded the state-defined threshold, which is either a revenue amount or a transaction volume.
A Dedicated Sales Tax Manager
You don’t have to do sales tax alone thanks to Yonda’s dedicated support team. The process can be fully automated, but we assign a sales tax expert to your account, who will understand your business and be available to answer all your questions and provide practical support.
Simply contact us today to find out more about how we can make your eCommerce store 100% compliant.
Why It’s So Important to Register for Sales Tax
If merchants don’t register and remit their sales taxes, it could lead to legal and financial problems.
States have the right to legally demand all historic taxes you should have paid to them, and they can add ruinous penalties on top of that. What are the chances of them catching you? Very high!
In addition to the financial penalties that can be payable, there are other ways non-compliance can impact your business negatively, including:
You’ll fail a due diligence analysis if you ever sell or list your business
Your eCommerce store could be black-listed by the state
It will create irreparable reputational damage
Your product could be banned in multiple US states
Does This Apply to US Sellers Only?
No. While it is more likely a State will find and penalize a US business if they are not complying, the sales tax legislation applies to all merchants who sell into the United States. It doesn’t matter if you export your products from outside the USA or have a local fulfilment – if you sell to a State you need to consider your Nexus.
There Are 50 States to Consider for Your eCommerce website!
Sales tax in the USA is a consumption tax on the sale of goods. If you sell products to US states from your Shopify store, you might need to charge sales tax.
The tax is imposed at a state level, so there is no federal law which governs the tax for the USA as a whole. The first state to implement a sales tax was West Virginia in 1921 and since then, it has been adopted by 46 states (and is used in Washington DC).
Although the tax is charged by the state and local authorities, it is administered by the seller who is responsible for charging it. Shopify merchants must charge sales tax if they have ‘Nexus‘ in the state, which is the USA’s way of saying “a legal obligation to register and collect sales tax”.
Every state has different rules, so it is not so simple to know where you have to register.