Sales tax rules are incredibly complicated. If you are asked, “Do you need to charge sales tax on a Milky Way candy bar?”, the answer is NO. It is not food. (Which is a little scary, but that is a topic for another blog).
What about a Milky Way Midnight Dark candy bar?
Are you sure?
Would you bet an audit on it? (Keep in mind that the average cost of an audit is $96,000.)
The answer in this case is YES. It is taxable. Because a Milky Way Dark has flour in it, so it is considered a food product.
But wait, that’s not all….That tax rule does not apply in Washington State.
There are over 11,000 tax jurisdictions in the USA. So you would need to know the laws in your own area. Not just your own state, not only your own zip code…sales tax laws can change from one side of the street to the other. I’m not kidding.
I learned all this from Amiee Keenan at Avalara. Avalara provides sales tax add on products for Microsoft Dynamics GP.
Avalara takes care of all the sales tax rules for you, even tracking locations down to the latitude and longitude coordinates to make sure you are in compliance wherever you are and wherever you are selling or shipping products.
It doesn’t matter if you are a small ‘Mom & Pop” shop or a global enterprise. It doesn’t matter if you are selling candy bars, software or widgets. Everyone needs to be sales tax compliant. (Did you notice the average cost of an audit is $96,000? It’s worth repeating…).
Find out more about Avalara tools:
By Anya Ciecierski, CAL Business Solutions, Connecticut Microsoft Dynamics GP Partner, www.calszone.com