U.S. taxes taxes taxes

I need help with this, what the government expects from a small business with regards to this is ridiculous in the US. Anyway, I'm looking for feedback on two fronts.

1/ From what I understand, I don't have ANY TYPE of base of operation with regards to facilities, employees, marketing, anything, in any other state besides mine, and I don't expect to do 100K+ my first year out of state. This means I don't have to collect taxes or file anything in any other state besides mine correct (yes I know there are a couple other nuances between states and I should finalize with an accountant)?

2/ There are a bunch of different services so I'm looking for feedback from what people are using here. I see extensions for avalara, taxjar, taxcloud, taxamo assure. I'm curious of pros and cons from users here from the integration to the service those companies provide. I basically want to set it and walk away and not worry about the service or the 100 different taxes in my state, or the 5000 different taxes around the country when I'm ready smh.

Thanks.

That would be incorrect ... regardless if it's the first year in Business and working offshored, you still need to collect taxes ...

That was my initial understanding of collecting taxes in the US with the law change. But then I started reading about Nexus states with physical locations and previous years sales amount/transactions for that state, that obligating you pay income tax or collect sales taxes in a state other than yours. No business presence or low transactions...no tax. Do I have a misunderstanding of Nexus states? Even the tax services I mentioned state this.

Yes, it's complicated, and yes, you may not have to pay taxes in states beyond your own. You are correct that each state defines "nexus" differently, and if you cross their threshold (either by amount of sales, or number of orders) then you are supposed to pay tax in those states. With a low number of sales in your first year, and transactions mostly in your own state (or spread out across all states/countries) then you may not have a nexus in other states. That means you may only need to pay sales tax in your own state.

Once you do start crossing that threshold, then tax calculation services like TaxCloud, TaxJar, and Avalara can help automatically calculate the correct amount of tax for each state, and help you file tax reports. With a lot of transactions they can get costly, so if you expect a low amount of sales in your first year, then it's probably worth it to just calculate things manually (or pay tax out of pocket if you do end up needing to pay tax in another state).

I'm still looking for a lower-cost solution for tax calculation, perhaps one without reporting, but I haven't found a lot of services out there. Someone mentioned one to me that I'm following up on, so I may have that available later this year. In the meantime, if you do find any low-cost services out there with a good API, let me know and I check them out for creating an OpenCart extension. People can contact me here:

www.getclearthinking.com/contact

Johnathan wrote: ↑

Mon Apr 18, 2022 9:37 pm

I'm still looking for a lower-cost solution for tax calculation, perhaps one without reporting, but I haven't found a lot of services out there. Someone mentioned one to me that I'm following up on, so I may have that available later this year. In the meantime, if you do find any low-cost services out there with a good API, let me know and I check them out for creating an OpenCart extension. People can contact me here:

www.getclearthinking.com/contact

Regardless if one API would provide a tax service without reporting the claims, the revenue agency of the state will still be able to charge these claims to the users.

The idea of using a low-cost service without reporting would be to file your own reports with the state. Some people don't need a service to file tax reports for them, they already have software to do it themselves (or want to handle it manually, if it's only a few states).

Johnathan wrote: ↑

Mon Apr 18, 2022 10:50 pm

The idea of using a low-cost service without reporting would be to file your own reports with the state. Some people don't need a service to file tax reports for them, they already have software to do it themselves (or want to handle it manually, if it's only a few states).

The revenue of the state still have conformed copies of past transactions being done electronically even though users don't file reports about their claims especially improved since COVID. It's already expected during the fiscal year on their behalf when those time comes.

All we can do is accept and adapt

Brian-75 wrote: ↑

Tue May 24, 2022 4:41 pm

All we can do is accept and adapt

Yup, pretty much.