E-commerce Site Internet Sales Tax Solution

Internet sales tax is now becoming an integral part of an ecommerce business, but that hasn’t always been the case. Back in the old days of ecommerce, consumers and retailers were both able to enjoy avoiding this tax. Regulations were almost nonexistent at the time and online shoppers grew accustomed to not having to pay website sales tax. As a result, e-commerce businesses began growing exponentially.

Unfortunately the free ride is almost over. A number of states are beginning to set regulations and cry foul over the loss of billions of dollars worth of tax revenue over the past few years. Retailers without a web presence are also arguing that online businesses have an unfair advantage, because they are not required to charge the same tax. Both parties are calling for a new national internet sales tax to be set up.
For now, the majority of states only require online businesses to collect internet sales tax from customers who live in the same state as the physical location of their business. Some states have stricter rules and take into consideration merchant account, distributor, warehouse, drop shipper and sales representative locations as well. It is critical that you read the tax regulations of all the states with any kind of link to your business. If you fail to pay the applicable taxes, there will be consequences that could seriously damage your business. Not only will you have to pay the total amount you owe, you will also be fined interest and penalties for each year that you did not pay.
Follow this checklist to get started:Research each state that your business has any kind of involvement in and figure out whether or not you need to collect internet sales tax from consumers in that stateRegister to collect taxes in the state or states you are required toCollect website sales tax automatically through a reliable e-commerce/shopping cart solutionFile a tax return to the appropriate state(s) and include total proceeds with your return
There are a number of important features to look for when selecting an ecommerce solution capable of automatically collecting internet sales tax from appropriate customers. They include:
- Simple website sales tax wizard built into the store admin
- Automatic calculation of tax amount during checkout
- Simple setup which allows you to choose tax percentage by state, county, zip code or country
- Be able to mark down nontaxable products
- Canadian tax support
- Choose whether tax should be applied before or after discounts
- Choose whether certain customers or customer groups are exempt from taxes
To ensure there are no problems on your tax return, you must rely on a good sales tax software to calculate and record accurate internet sales tax. Not only does your ecommerce solution have to have this feature, it also has to be easy to set up so that you only need to enter the necessary information once and it will automatically do the rest.

Source: Google.com