Sales tax is complex enough to need its own specialists. The same product can be taxed differently depending on who the customer is, what exactly is sold and where you have nexus, and every state has its own laws, rates and rules. That’s why Orbiss has a dedicated Sales Tax Department: a team that identifies your liabilities, tracks legal changes and keeps you compliant from your very first sale.
Most tax and accounting firms don’t have a dedicated Sales Tax Department. So why does Orbiss have one? And what’s so great about it?
We’re glad you asked! To illustrate the importance of sales tax expertise, let’s consider the humble croissant.
Did you know that in New York, a simple pastry sale can be taxed in no fewer than four different ways depending on the specifics of the sale? It may appear harmless, but don’t let the croissant fool you. This petit French treat can wreak havoc on your business if your sales aren’t properly managed. Let’s dive into the perplexing world of croissant taxation. Here are some of the different sales tax possibilities:
“How can this be?” you may ask. “Four different tax implications? It’s just bread!”
Au contraire, mon frère. Alas, sales tax is rarely that simple.
It all depends on the context of the sale. The croissant ambiguity remittance basis (CARB) varies dramatically depending on where it’s been sold, who it’s been sold to and more. Generally, sales tax is determined by three main factors:
“Oh là là!” you say. “Enough! Take the croissants out of production and be done with it!” But buckle up, we’re just getting started.
Croissants are complicated enough, but what about the taxability of digital products and services? How are SaaS sales taxed, for example?
The answer is a sales tax expert’s favorite phrase: it depends.
Every state has different laws, rates and regulations when it comes to sales tax. Interstate sales add another layer of complexity; some states even have reciprocal agreements with one another. If your business operates in multiple locations, you may have a web of conflicting regulations to navigate. Even with the best intentions, maintaining tax compliance is a highly complex undertaking.
And yet, determining your sales tax liability is crucial. Failing to pay, file or report can lead to severe consequences, including hefty fines and potential criminal charges. Underpaying sales tax means your business will ultimately have to make up the difference, a potentially crippling financial burden. That’s why it is very, very, very, very important to make sure your business is aware of its potential sales tax liabilities from day one.
There is a lot to consider. You always need to balance the shifting tax implications of your product, customers and nexus, not to mention local, state and federal regulations that can change daily. And the onus to comply falls on the business itself, not on its clients or regulators.
That’s where our Sales Tax Department comes in. Our team is dedicated to identifying your potential liabilities, tracking legal changes and planning for the long-term success of your business. By working proactively, we’ll keep you in compliance from your very first bake sale. While some firms can assist with sales tax, Orbiss has an entire team that specializes in sales tax. We’re here to manage the technicalities so you can focus on what matters most: perfecting that secret croissant recipe.
With all that in mind, do you really want an accounting firm without a Sales Tax Department? Talk to our sales tax team.
Every state has different sales tax laws, rates and regulations, interstate sales add another layer, and rules can change often. Whether a sale is taxable depends on the customer, the product or service, and whether you have nexus in the location.
Whether the customer is taxable, whether the product or service is taxable, and whether you have sales tax nexus in the relevant location.
It depends on the sale. A croissant sold frozen in a supermarket or fresh from a bakery is tax-free, but a croissant reheated in a bakery is “prepared food” and subject to sales tax. Selling in bulk for resale brings its own tax implications.
Failing to pay, file or report sales tax can lead to hefty fines and even criminal charges, and a business that undercollects must make up the difference itself. The responsibility to comply falls on the business, not on its customers or regulators.
This article is for general informational purposes only and does not constitute legal, tax, or accounting advice. Rules and requirements vary by company, individual, and jurisdiction, and can change. Please seek advice appropriate to your specific situation.