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If you thought tax season was a trial, e-commerce operators haven’t seen anything yet. By the end of the year, 23 states will be charging e-commerce businesses taxes. Imagine. Different products are categorized differently and taxed differently in different states! But never fear; Solid Cactus and Avalara can make your life easier when it comes to charging and collecting taxes as well as assembling the necessary tax reports.

The problem many merchants on the Yahoo! Store platform encounter is that you need to manually set up all the zip code ranges and add a flat rate or percentage. This is time consuming and must be manually updated when county level, city or municipality taxes change. In Tennessee, the sale of an item is subject not only to the state sales tax of 7%, but the local sales tax on the first $1,600, plus an additional state sales tax of 2.75% on the second $1,600, all of which cannot exceed $3,200 - potentially subjecting a sale to a 9.75% sales tax rate. Confused yet? Here are some other exotic tax laws:

• In Minnesota, non-edible cake decorations are taxable, but edible cake decorations are exempt.

• In Texas, plain nuts are exempt “food,” but once a candy coating is added, they become taxable “candy.”

• In Rhode Island, fruit juice that is less than 100% pure is taxable. Cranberry juice cocktail – a mixture of juice and water, or concentrate — is exempt.

• In Massachusetts, a clothing item costing up to $175 is exempt from sales tax. However, any item costing $175.01 and above is subject to the 5% state sales tax.

• In New Jersey, naturally carbonated water is exempt, but artificially carbonated water is taxable.

• In Pennsylvania, state and U.S. flags are not subject to tax, but if either is sold with “accessories” (i.e. a pole), the entire purchase becomes taxable.

With many states adopting the Streamlined Sales Tax or SST (http://www.streamlinedsalestax.org/) there will be more rules in which products will need to be taxed. Some changes will be difficult for merchants to manage as they relate to how products are sold. Currently17 states are “Full Members” of the SST:

• Arkansas

• Indiana

• Iowa

• Kansas

• Kentucky

• Michigan

• Minnesota

• Nebraska

• Nevada

• New Jersey

• North Carolina

• North Dakota

• Oklahoma

• Rhode Island

• South Dakota

• Vermont

• West Virginia

• Wyoming

In addition to the 17 “Full Members” several other states are considered “Associate Members,” meaning they’re in line with the SST requirements although the state is not yet in full compliance. They are:

• Ohio

• Utah

• Tennessee

• Washington

The SST rules will affect different merchants in different ways which could make calculating sales/use tax a “taxing” task. Finally, there is a solution.

Solid Cactus has partnered with Avalara, a leading provider of real-time tax calculations and a SST certified tax solution. Among the features of this partnership are:

Reports and Remittance:

Save time and resources by using a single solution, integrated into your financial application to submit one remittance payment. Avalara not only takes care of the forms you need for each jurisdiction where you have nexus, but also remits the liability on your behalf.

Reporting Tool:

Comprehensive and easy to use, Avalara’s reports provide detailed, summary and exception reports to satisfy statutory tax return requirements. Ensure full statutory compliance, superior internal process controls, and best practices for sales and use tax.

Reports:

AvaTax offers a crucial component to sales tax compliance: detailed, on-demand reports provide you with quick access to the information needed to prepare and submit sales tax returns. You can easily and quickly generate reports, which can be exported to the file format that works best for you.

The Shipping Manager integration with Avalara lets you offer features to enhance your business performance and will make your life much less stressful come tax season.

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