A recent article in The Wall Street Journal titled “Web Sales-Tax Ruling Jolts Small Businesses” points out the possibly dramatic effects of last year’s Supreme Court ruling in a dispute between Wayfair, Inc. and the state of South Dakota, which held “that states had the authority to make online retailers collect sales taxes even if they didn’t maintain a store, warehouse or other physical presence.”

This is a likely game-changer for any company doing business over the internet.

Sales taxes are levied differently in every state, and who pays what varies widely.  It’s a complex web of regulations, requirements, taxing methodologies and of course taxes and penalties for those who fail for whatever reason to comply.

“Small businesses are definitely the ones that are really adversely affected,” notes a tax attorney in Atlanta.  “A bigger business is typically going to have more robust sales-tax software.”

The problem in a nutshell is tracking, since each state applies its own rules and logic, as well as minimum taxable thresholds.  As the article notes, most states have tried to limit the impact for smaller sellers.  For example, South Dakota exempts sales under $100,000 or fewer than 200 transactions; California has a $500,000 threshold, while Kansas has none.

The challenge for the small to midsize business is keeping track of all the limits and regulations to ensure compliance.  One firm noted that it spent $25,000 last year tracking $90,000 in taxes.  Another noted that it took more than a week to determine that his one-person company didn’t trip any state sales-tax requirements, though it came close in several.

One solution supplier PSSI has worked with in the past (and who counts among its staff several former SBT Accounting Systems staffers, we might add) is Avalara, Inc.  Avalara’s software plugs into many existing accounting solutions, and takes the drudgery and guesswork out of state-by-state sales tax reporting, compliance and calculations.  (Avalara recently went public and, no surprise, has seen its stock price soar since.)

Anyone selling in other states over the web is now liable for sales tax calculation, collection and remittance.  Companies like Avalara aim to make this new business burden manageable.  If you have web-based sales across state lines, you may want to look into a sales tax solution soon.  Before the states start coming to you.

Do you need help with your processes and automation?  We’re here, we’re local, and we’re here to help!  We invite you to contact PSSI directly at 877.273.2444.

PSSI has been implementing ALERE accounting and manufacturing software for over 25 years, and we still think it’s one of the best-priced, best-functioning manufacturing software products you can buy anywhere.  Users appreciate ALERE’s flexibility over many other systems. 

This month, TIW Technology President Rod Hatcher reminds us of a single fact that makes all accounting make sense.  His comments follow…

When you are not familiar with accounting it can be quite intimidating. Heck, just the word “INTIMIDATING” is intimidating! Debits and credits – how do you know what they do and when to use them? But, in truth, just knowing one fact can make sense of accounting. And what is that one fact you ask?

You always debit an expense.

It can’t be that simple! In fact, it is. Just knowing that you always debt an expense will allow you to figure out everything else. After all, accounting is all about making two offsetting entries that add up to zero: a debit and a credit. For example, if you buy office supplies you debit expenses. If they came out of your checking account, then you credit the checking account. If you sell a towel, then you debit the checking account which is the opposite of taking money out of it. That leaves crediting a sales account. Follow how that works?

Of course, a little chart of shortcuts can help:

This table chart can be found in your ALERE HTML Manual by clicking on the Finance section instead of the “+” button to open the section.

Want to Learn More About ALERE?  

TIW has a 7 minute “Manufacturing Overview Video“ on YouTube that gives a concise summary of what manufacturing software can do for you.  Click the link below to see why ALERE may be a great fit for your manufacturing operations.

• Interested in a trial version for your organization?

PSSI can work with you to understand better what a manufacturing software system can do for you.  For information on obtaining a trial version, contact Larry Lukasik at the number below.

To learn more, call us any time at 877.273.2444, or visit us on the web.