Tax laws

February 2022 review: the tax laws you need to know

While you focus on your business, we stay on top of legislative and policy changes that may affect your tax compliance.

Should online sellers be required to accept cash payments? Can you use zip codes to determine tax rates? This month’s roundup covers these topics and more. Read on for more details.

Cash, please.

Shopping online is supposed to be the essence of convenience, but it can be difficult for the millions of Americans who don’t have a bank account or access to credit. To help level the playing field, some states want retailers — even online sellers — to accept cash payments. Learn more.

Change is happening.

A new local reporting requirement in Upstate New York effective March 1, 2022 is just one of the changes affecting sales and use tax compliance. Learn more.

(Don’t) close the zipper.

Postal code and tax limits sometimes line up, but often they don’t. And that’s okay, because the purpose of ZIP Codes is to streamline mail delivery, not to meet sales tax. Learn more.

Drop it.

Dropshipping can be a win for all parties, but since dropshipping typically involves one customer, two businesses, two sales transactions, and often two or three states, it can make sales tax compliance a bear. Learn more.

More time.

Colorado’s slow transition to destination sourcing began in 2019, shortly after the state began taxing distance sales. Destination sourcing was scheduled to take full effect on February 1, 2022, but has been pushed back to October 1, 2022. Learn more.

Put the tax in its place.

Among the unsung jobs of a retailer is collecting sales tax on behalf of state and sometimes local governments. Another responsibility is to ensure that the tax collected ends up where it needs to be, when it needs to be there. Learn more.

Dispatch.

Just as there’s no one way for an e-commerce business to get products into the hands of customers, there’s no one way to tax shipping and delivery. Learn more.

Stay at home.

Working from home has both advantages and disadvantages, as many of us know by now. For home-based businesses, a challenge is determining whether to register with the Secretary of State. Learn more.

Healthy competition.

Drop shippers could benefit from a new report on competition in the beer, wine and spirits markets. Learn more.

Help us understand.

Although many wineries rely on fulfillment houses to store, package and ship wine, fulfillment houses remain largely misunderstood. As a result, they risk being banned. Learn more.

Don’t neglect the past.

Even a small change in sales and use tax laws can have a large impact on sales and use tax compliance – such as when a state retroactively applies an old economic nexus threshold. Learn more.

Keep your head up.

Industry experts expect B2B e-commerce and headless commerce to gain momentum in the months and years to come. Learn more.

Stack it.

In addition to increased theft on the railways and increased pressure to prevent the sale of stolen goods, marketplaces are facing new tax requirements. Learn more.

Swipe right.

Although few, if any, states have adopted a specific tax on dating apps, most states tax online dating transactions. Learn more.

Taxes on the vape on the rise.

There is still no federal excise tax on vaping products, but state and even local taxes on vaping products are becoming more common. At last count, 12 more states were considering taxing vaping products or e-cigarettes. Learn more.

Check Avalara Resource Center for more useful information.