Although online selling played a very crucial role in sustaining numerous small businesses during the most challenging phase of the pandemic, it now catalyzes their growth. While the exponential expansion of e-commerce observed in 2020 and 2021 has decelerated, the overall upward trajectory of e-commerce remains intact.
In fact, in 2022, online retail sales surpassed the milestone of $1 trillion for the first time.
The reasons behind this trend are evident. Websites allow businesses to reach a vast audience, from local customers to those residing in 9 states away. Selling online lets businesses connect with consumers across various social media platforms and virtual environments, boosting engagement and resulting in more leads.
Additionally, e-commerce provides valuable insights into consumer purchasing behaviors and market trends, making it an advantageous avenue for growth.
However, as with any growth, there are accompanying challenges.
The Unexpected Challenge
When addressing sales tax, the key distinction between an online marketplace and an e-commerce platform lies in the following manner:
- Typically, online marketplaces must gather and submit sales tax on behalf of their third-party sellers.
- While e-commerce platforms are not obliged to collect and remit sales tax for the merchants utilizing their services.
Expanding sales into new markets may lead to new tax obligations. To sustain ongoing success, it becomes essential to efficiently handle the collection, remittance, and filing of all taxes owed.
The ability of your e-commerce platform to assist in managing sales tax depends on the specific platform you choose. With a plethora of e-commerce platforms available in the market, each offers distinct features.
While some platforms automatically cover certain sales tax requirements, others do not, and many may handle aspects of sales tax compliance through add-on features.
Collecting Tax Info
When choosing an e-commerce platform, it’s crucial to conduct thorough research to understand what measures enable the platform to handle sales tax collection on your behalf. Some important things you should consider are:
- Is the process as simple as toggling a switch, or is it necessary to subscribe to a dedicated sales tax service integrated into the platform?
- Are there additional charges associated with the e-commerce platform’s handling of sales tax? Or, is this service already included in the base fee?
Additionally, the possibility of outsourcing sales tax calculations may be worthwhile.
Let Us Handle It For You
You certainly didn’t launch your company to file taxes or memorize your country’s tax laws, but these things have to be done. We realize that many business owners may not have the time or know-how to take care of these things themselves. That’s why we formed SalesTaxSolutions.US.
Let us handle all your worries about tax compliance and tax filing issues. And in return, you’ll get more time to focus on developing your business and making your customers happy.