The 2018 Supreme Court ruling South Dakota v. Wayfair has drastically complicated sales and use tax compliance for field service businesses. With economic nexus laws popping up across the nation, more and more sellers are required to pay sales tax—and few business leaders realize it. Worse still, even businesses with exempt sales may face overwhelming sales tax compliance needs this year.
Fortunately, you can learn to stay fully tax compliant and avoid reputational damage—all while saving time and money—by watching our upcoming web series, starting with “Sales Tax Is Becoming Ridiculous!” with Chris Rossini from Avalara. Here’s more about how this recent ruling could hit field service businesses and how our new webinar could help you avoid tax pitfalls.
Tax Legislation Could Wreak Havoc on the Field Service Industry
What does the South Dakota v. Wayfair case mean for your business? Essentially, it means even if your business isn’t physically located in a state, but you collect $100,000 in state sales or conduct more than 200 transactions (i.e. invoices), the state may require you to account for sales taxes. The result is more complex tax liability, more stress, and a potential for massive revenue losses. Worse yet, even if your business operates in a single state, this new ruling could entangle filings, leaving you with a chaotic tax situation.
The danger?
For HVAC, commercial refrigeration, and full electrical services, economic nexus laws are complicating tax liability and setting the table for disaster. Too many businesses wrongly think their own equipment or the products their customers use are exempt from taxes. If you run a field service company that operates in multiple states, you may soon find out you don’t have geolocation technology to even track these taxes, let alone report on them. Businesses from all facets could face the overwhelming task of managing multiple tax jurisdictions. And if you have exempt sales, the onus is on you to prove why you didn’t collect sales tax.
Whether you realize it or not, misunderstanding these increasingly complicated tax regulations could lead to massive problems in the near future, including:
- Accidentally passing sales tax on to customers and sparking disputes
- Absorbing extra tax costs that eat into your business’s bottom line
- Being hit by fines or legal action
- Falling into auditing nightmares
- Wasting time and productivity trying to understand complicated tax regulations
Tax Automation Can Help Your Business
Luckily, tax automation technology is now simplifying sales tax for businesses, reducing risk, and saving money. Sales tax automation software can help you navigate this new ruling and help your business:
- Minimize the risk of misreporting or being caught off guard by audits
- Avoid wasted hours manually preparing taxes
- Cut down the stress of navigating complicated tax codes
- Ensure your exemption certificates are up to date
- Reallocate resources to the most beneficial areas of your business
- Keep your customers from absorbing unfair costs
- Retain more of your business’s capital
Want to learn exactly how to use tax automation technology to comply with new laws? Join our upcoming sessions to learn more about how sales and use tax compliance is getting more complex and what you need to do to handle it. Our first webinar in the series, “Sales Tax Is Becoming Ridiculous!” will feature Chris Rossini from Avalara.
