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Partner Webinar: Marketplace Superheroes How TaxJar Makes Managing Your Amazon Sales Taxes Simple

Partner Webinar: Marketplace Superheroes How TaxJar Makes Managing Your Amazon Sales Taxes Simple


– [Announcer] The
broadcast is now starting. All attendees are in listen only mode. – [Robert] Good afternoon, Heroes or as I always say could very well be a good morning or even a good evening, depending on where you are in the world. This is Robert here today,
coming into you from Ireland. And it’s great to be able to
bring another value session for Marketplace Superheroes. Today I have a special guest on, which is always great to
bring special guests on. Especially whenever they
have such knowledge, and even more so inside a
particular subject matter and one that always causes, let’s say, a lot of confusion. It’s one of those ones, we
would like European VAT, American sales tax is
certainly difference to that. And today we’re joined by
Lizzy Greenburg from TaxJar. So I just want to first of all do a quick sign check to make sure
that you can hear her. So Lizzy, are you there? Just wanna give us a quick sign check. – [Lizzy] Yeah, hi everyone. Lizzy Greenburg here. Let me know if there was any audio issues. – [Robert] Yeah, 100% Lizzy. Thanks very much. So everybody out there,
if you can hear myself and you can hear Lizzy
then just let me know inside the questions box, just
with a one as we normally do. We run through and that. So just while we’re waiting
on the rest of the room to sort of fill in up, I
know that we have a lot of members of Marketplace Superheroes, we call them Heroes. So if you’re coming in today as a Hero, just let me know inside
the box if you’re a Hero. If you’re not a Hero, or
should I say not a Hero yet, just let me know with a not yet and we’ll give you a bit of a shout out while we’re waiting on
the rest of the room just filling up. So we’ve got a lot of Heroes here. We’ve got Celeste, we
got Peter, we got Hart, we got Anthony, Cody,
Wayne, Keith, Roman, Lisa. We got some non-heroes, they said not yet. We’ve got Sondra, we’ve got another Lisa. Lots of Lisa’s in the room here. And many, many more. So without further adieu,
as they say, I know, you know we respect your time. And I certainly respect
Lizzy’s time as well so I’m going to hand over to Lizzy. Let her share the screen. And, I’m sorry, show the screen as well which would be great. And then we will get rocking. So Lizzy, the platform is yours. Please enlighten everybody here today on simplifying sales tax in the US. – [Lizzy] All right, let’s do this. Thanks so much, Robert. Thank you guys for having me here today. I come from Houston, Texas. And so it is the morning here. But really excited to talk
to you guys about the taxes. I’m probably, me and the
folks that work at TaxJar are probably the only folks you’ll meet that are excited to talk about tax and help educate you guys
on what you need to know sales tax related. We know that most of you did not start your Amazon or Marketplace business in order to collect sales tax. So it’s a necessary part of doing business and we’re here to help make it easy and tell you what you need to know. So excited to be here. And if you guys, should
be able to see my screen. If there’s any issues, let me know, otherwise I’ll continue on. So a little about me, I’m
the Chief Marketing Officer here at TaxJar. I’ve been here for almost four years. I’m a seller myself, so
I completely understand how you guys are feeling,
to be in your shoes. I have over 15 years of
experience in eCommerce. I’ve sold across to Amazon, Ebay, Etsy, all the different
marketplaces and I still do. I do a little handmade
business on the side. So I’m very aware of
kind of the challenges you guys face with both Amazon and FBA and handling sales tax
across all these channels. I’ve personally been filing
returns in California and Texas for many, many years so
I know what it’s like to have to log in and
file all these returns. And if you haven’t done it, I think everyone should
probably do it once to really understand
the beauty of a solution like TaxJar and what it
can eliminate for you. Working at TaxJar and
throughout my business as an eCommerce seller, I’ve talked to thousands and thousands of sellers. So I was actually
yesterday, the day before at a Amazon conference in Las Vegas, talking to sellers, auditors, people, influencers within the state. So I’m very familiar with kind of what the challenges are right now and what you guys are facing. But I’m really here to make you help, help you make an informed decision. So at TaxJar, I was talking
to Robert earlier telling him, we are a technology provider. So we help you guys understand
all of the different data pieces, all the different
insights you need to know to make a decision. I will say, we are not CPAs. So if you are looking for specific advice or you need someone to tell
you should I do A or B, we can talk generally to
you and tell you kind of loose recommendations that
we recommend at scale, but we don’t provide specific insights or specific consulting advice. We really are here to help
you get the data you need, automate the remittence and compliance. But in the meantime, provide
you some education as well. So who is TaxJar? If you’re new to TaxJar
or haven’t heard of us, we have over 17,000 customers, so a ton and ton of Amazon customers and Marketplace sellers that are using us. We’re on a mission to make
eCommerce easier for everyone. So this is really the core of what we do. We’re taking something
that’s really complicated and frustrating for sellers,
and not just sellers, but everyone that actually
works in the eCommerce space. So whether it’s a
seller, it’s a developer, your team, it’s your CPA, you
are the merchant yourself, you’re the business owner, et cetera. Anyone that touches
sales tax as a company, we’re gonna help you understand taxes and make it easier and automate it. So today what we’re gonna do is talk about sales tax basics. So if you’re new to sales tax, the kind of concept of US
sales tax is new to you, we’re gonna tell you a few
things that you need to know, clear up a few misconceptions. And then we’re also gonna talk about two major pieces of legislation that are affecting
marketplace sellers today. So Wayfair, which is a
Supreme Court decision that happened last June, a lot of the legislations happening every single week since then. And then the marketplace facilitator laws. So that is when Amazon
collects on your behalf, which we’ll get into that. And that’s something
really important to know. And then I’m gonna tell you about how, a little bit about how to
TaxJar can help you automate, kind of what we do, what our offering is. And then I’m happy to answer
any questions you guys have on anything sales tax or TaxJar related. All right, so let’s get started. So what is sales tax? Sales tax is essentially
a system put in place for states to collect revenue
to fund different projects within their state. So sales tax revenue
helps states with things like infrastructure and public services. Sales tax is managed at
the state level in the US. It is not at, there’s no federal body. There’s no IRS handling sales tax. Most people, you know, are
familiar with income tax and the IRS and April filing dates. Sales tax is very different. Sales tax is managed at the state level, which essentially adds a whole
other layer of complexity because instead of one body
and one kind of legislative arm making decisions, you now
have a number of different states making decisions,
you know, on their own. There’s not really a uniform
governing body for sales tax. So there are 45 states plus DC, which means 46 different
sets of sales tax laws. Which means there’s 46 different ways that a state can define what is Nexus, what is taxable in my state, what is not taxable in my state. How much should I collect in sales tax, and how much should I require a seller to collect in sales tax? And then also, when are the filings due. So Texas may collect eight
and a quarter percent, and in New York it may be a
totally different percentage. And they may also say, in New York, you know, clothing is exempt
if it’s underneath $75. But in Texas, clothing
is not exempt under $75. So there’s a lot of, this
is kind of what contributes to all of the chaos and
complexity around sales tax, is the fact that there
is no one kind of central body around this. And then there’s all these
different definitions. And states are allowed to
interpret them on their own. The thing to remember
about sales tax, though, is that sales tax should
be paid by your customers. Sales tax is the cost of doing business. You need to be able to
comply and handle sales tax, but you as a business and a seller, should not be paying sales
tax out of your own pocket. So the states define it
as a pass-through tax. So what that means is you are essentially a collection agent. You collect sales tax
on the order, on Amazon or whoever you’re using as a marketplace will collect it for you,
put it in your bank account. And then you are responsible for getting that back to the state. So it’s passing through
you as a collection agent. And you’re supposed to remit
that back to the state. But you are not supposed to
be paying that out of pocket. And so the goal around
sales tax and understanding what you need to know is figuring out how you can set everything up so that you’re not having to have any kind of risk or liability or even having to pay on behalf of your customers because that eats into your margin. So sales tax is not a profit
driving piece to your business. It’s something that we
wanna help you automate so that you can spend time on things that will drive profit,
not things like sales tax that you know, are not
gonna really contribute to your overall bottom line. So the sellers are collection agents. You should never pay out of pocket. An important thing to
note here is that you need to register to collect in every state before you start collecting. So it is unlawful to start collecting before you actually are
registered in the US states. And it’s also unlawful
if you are collecting to not pass that tax on to the state. That is essentially tax fraud, so we’d never recommend that. If you are collecting,
even if you collected the wrong amount and you over-collect, we recommend contributing
that entire amount over to the state. So you never wanna keep
sales tax and not remit it to the state, that is where
you can get into some trouble. But generally, sales tax is
pretty simple, pass it through. So I mentioned this word earlier and I waiting ’til here to define it. But this is a kind of popular
word that you hear a lot, is what is nexus and sales tax nexus? So you’ll hear the term nexus in relation to when you need to comply
with sales tax in a state. So the only thing you need to remember is when you’re shipping an
item to a state in the US, that state, to determine
whether or not you need to collect sales tax, the
only question you need to ask yourself is, do I have
sales tax nexus in that state? So if you’re shipping to a
state where you have nexus, then you collect sales tax. If you’re shipping to a state
where you don’t have nexus, you don’t need to collect sales tax. And what nexus is, is
significant enough presence as defined by that state that you should be complying
with their sales tax laws. And we’ll get into what
nexus is right after this. But you only, when you think about, okay I’m getting into
the selling in the US or I’m already selling here. Oh no, I have to comply in every single, all those 46 different
areas and collect sales tax. No, you only need to worry about the ones out of that 46 where you have nexus. So leading to that, what is nexus? So nexus is defined as
a significant presence or connection to a state. And there’s a number of different things. And generally, they fall into two buckets. One is physical nexus. So these are things you
can’t really dispute because they’re physical
and tangible things. So whether you have an
office in your location. So even if you’re working
out of your garage apartment or the basement of your
house, that is your office even if you don’t have employees in it. Wherever you’re based is
your home base in the US, that counts as physical nexus. Wherever you have employees. So if you have employees in another state, if they’re working from that state, then you have nexus in that state. If you have a brick and mortar store. So if you have a retail
establishment or if you have warehouses in a certain
state, that counts as nexus. And one that’s particularly
interesting for Amazon sellers is that FBA, if you’re
using Fulfillment by Amazon, then wherever you have
inventory stored in a warehouse that’s being shipped to customers, that FBA warehouse is
technically physical nexus. The other side and the new
things that we’ll talk about is a concept of economic nexus. So economic nexus means
you have a requirement to pay sales tax in a
state due to your economic activity in that state. So you may have never set
foot in Texas, for example, but according to the state, if you have made a certain
amount of transactions and/or a certain amount
of revenue in that state, you then qualify as having an obligation. And a lot of folks will
say, well why is that? You know, I’ve never been to that state. I’m not doing business there. What the states have decided is because you are sending
so many of your products into that state, you’re putting a signif– You’re essentially using
a significant amount of those state’s resources. Things like roads,
infrastructure, you know, actually mailing your goods
and getting those goods there. So sales tax goes and
funds those programs. And so that’s kind of the
concept behind economic nexus. And if you’re doing that
much economic activity in that state, you owe
that state sales tax to help contribute to those things that allow you get your
products to those customers. So there’s a couple other things on here. There’s drop shipping
third party can cause nexus in certain states. Affiliates, if you have
affiliates in different states. If you’re running a temporary business, so you do trade shows or
you’re selling inventory at pop up shops, those can cause nexus. But generally, this is a
piece where before you get started with sales tax,
you need to do kind of an analysis of your
business and figure out, okay, do I have physical
nexus in certain areas? Do I have economic nexus? And TaxJar has some tools to
help you do that automatically. And so as I mentioned,
FBA nexus is kind of the most common surprise for folks that aren’t collecting
or are getting into FBA as a new seller. So there’s a lot of different states. We keep up with all of the
states where FBA has nexus, or FBA gives you nexus. The thing about this is that
these are all the locations in the states where there are
currently fulfillment centers. You as a business may not
have all your products in all of these. So as to not overwhelm you, this is kind of the maximum
amount of states for FBA that you could have nexus
in due to FBA inventory. However, if you only, if
you’re just getting started, maybe your products are in three or four or five fulfillment centers. You may not have them in all of these. So what I would recommend is keeping track of any new inventory and
TaxJar helps you do that. And also on the right I
have a little screenshot of the TaxJar blog. So if you go to the categories at the top, Amazon is one, we keep up to day with all the fulfillment centers,
all the sort centers. Everything that’s going on,
so that we’re constantly updating you with, you
know, letting you know how often these things are
opened and where they are. So with TaxJar we show you exactly, for your particular products,
where they’re being stored and we put that on your dashboard, which I’ll show you a little bit better in the TaxJar, kind of, overview. And then we also help
you with economic nexus and I’ll show you a tool
that we have to help you with that as well. So Wayfair versus South Dakota. So this was the Supreme Court decision that came up last year. And if you’ve been keeping
up with anything sales tax or even this may have piqued your interest in joining this webinar
today is kind of the concept of Wayfair, you may have
been hearing about this. You know, what is Wayfair
and what actually happened? So as I mentioned, there’s kind of these, today there are these two different ways that you could have nexus,
physical or economic. Previous to Wayfair, it
was really all physical. The concept of economic
nexus didn’t really exist. So what happened was, you know, as a business you needed
to know where you had that physical nexus. You needed to be able to assess that. And then South Dakota
was the state that said, look, there are a lot of these retailers doing significant amount of business that are using resources in our state and we’re gonna introduce the
concept of economic nexus. So they said, and they
made this definition of if you have made more than
$100,000 in gross sales into South Dakota or have
shipped over 200 units or orders into South
Dakota, then you have nexus. And what they did is they then
sued a few major retailers, Wayfair being one. Newegg and a couple other
eCommerce retailers. Wayfair took them to the Supreme Court and this was a decision that came out in June of last year and
was highly anticipated. It went, it was you know,
being decided for a long time. And the court ruled in
favor of South Dakota. And said, okay, this
definition of economic nexus is legal and established
a precedent for being able to create a definition
of economic activity that requires a company to create, or to comply with sales tax laws. So essentially, it established this constitutional economic nexus. And this added a whole
‘nother layer of complexity to sales tax in the US. It was already, for an Amazon seller, really difficult to figure out where you even have inventory with FBA. And now on top of that
you need to figure out where you have economic nexus. So each state has made their
own laws relating to this. So it’s not $100,000 and 200
transactions in every state. Some states have said, well it’s $500,000 and there’s no transactions. Some states have said, $100,000
and it’s 200 transactions. So there’s a lot of combinations
of different numbers, different logic, whether it’s and or, or. Some states have no
transaction limit at all and it’s just revenue. And so we keep track of all of that. There’s 29 states, there’s
actually I think since I made this slide there was a
few more that have come out, so there’s about 30-something states that have economic nexus. But we track all of it on our blog. And this right here on the right is a map kind of showing you the
complexity right now. There’s a bunch of
states with economic laws that are active. There are future ones. So states have actually
said, this is active and it will take effect later this year. So those are the ones in yellow. And then there are some
states where they have lawsuits that are pending litigation, being able to be very clear on it. So as you can imagine as a seller, there’s a lot of complexity here. There’s a lot to figure out. So the physical stuff is stuff that you have to figure out. But you know, it’s a little but simpler. But the economic nexus
laws, that’s, you know, 30 plus different
definitions of economic nexus is really challenging. So at TaxJar what we’ve
done is we’ve really worked to help simplify that. And so instead of you
having to sit there in Excel and take a look at,
okay, counting how many transactions you’ve made
in Alabama, for example and how many sales you made. We do all that for you. So we have a tool called the
sales and transaction tracker. It’s brand new, it came out. We made it essentially right after Wayfair because we understood that
the customer needed this. And it’s completely free. You have to start a free 30 days trial, but you can use it for free. There’s no credit card required. You can plug in here
and see where you stand. But essentially, we’ll tell you
for all the different states how many sales and transactions
you have in that state. And then where are the
thresholds you’re crossing. So it may be that you’re
just getting started and you don’t have economic
nexus anywhere, which is great. But it may be that you
have five states in there that you are crossing the threshold in. And so it’s important to
just know where you stand and that’s where TaxJar
helps give you that data, to know where you stand
according to all these laws. And not spend that time
trying to figure it all out on your own because that’s
valuable time that you could be spending sourcing
and finding new products for your business, not
sitting here analyzing these sales tax laws. So the sales and transaction checker is highly, highly recommended
a service you try, just to know where you stand. And any TaxJar subscriber
that continues with us can use this at any time. And so it’s just a way to kind of check and figure out where
you have a requirement, especially as your business grows. All right, the next piece of legislation that’s really important
for marketplace sellers is gonna be the marketplace
facilitator laws. So this is a piece of
legislation that’s happening in a couple states that is causing a lot of confusion for sellers
and a lot of kind of, I would say miss. So when people say, oh
I don’t need to worry about sales tax because
Amazon is collecting for me. They could be referring to
this law or one of two things. When Amazon sells a product on Amazon.com, say they’re selling a
Kindle or they’re selling they’re private label diapers, when they sell a product
that is sold by Amazon and the actual, if you look at the seller, whenever you’re checking
out, it’s by Amazon.com, Amazon collects in every single state that they’re required to. And that’s all 46 of those. That kind of purchase
and the fact that Amazon is collecting in every single state is different for third party sellers. So if you are an Amazon
seller that’s doing FBA, you are the merchant
of record, not Amazon. And so the same way you can look and see who’s selling things
within any kind of listing, if you see your name
there and your business, you’re the one responsible for sales tax. And that’s the way it’s
kind of always been. And so if you are using
Amazon as a vendor, so Amazon is purchasing your products, you don’t have a sales tax requirement, the same way you do third party because Amazon is that vendor. So just to clarify that. So Amazon is giving you that, you know, sales tax liability I was saying. Okay, it’s up to the
third party to actually collect sales tax for them. But a few states have created
legislation that have said if you are a marketplace and
you are facilitating sales on behalf of your third party sellers, the sellers are not responsible
for the sales tax, you are. And so there is about
seven or eight of these that are active right now, so
it’s not every single state. But there are certain states that this is really helpful for because
Amazon is collecting and remitting on your behalf. So there’s about 10
states there and counting that require it. These things happen literally everyday so our blog has the most
up to date information. I think there was even a new
one that passed yesterday, but marketplaces are
essentially defined as things like Amazon,
Ebay, Etsy and Walmart. Those are the top four marketplaces today that are enforcing these. And they have different dates
on when they enforce them and when they are required to. But if you are a seller
that is only selling via marketplaces, this is a
law that is helpful to you. If you are a seller that is multichannel, which most eCommerce businesses are today, so you also have a Shopify
store and you’re selling direct to consumers in any other regard. So if you’re, you know,
doing festivals, et cetera, you’re not off the hook for sales tax due to these marketplace facilitator laws. It’s really only helpful
for a single channel Amazon or single channel Ebay. Like a single channel
marketplace business, because with sales tax
the state is concerned with how much you’re
making in their state. They’re not concerned with
what channel it came from. So if you have an Amazon
business in Texas, but in Texas I also, you
know, sell at craft fairs, I still have to file a
sales tax return in Texas because of the sales that happen
outside of the marketplace. And then there’s instructions
that the state gives you on how to deduct marketplace
facilitator collected from that marketplace on
your sales tax return. So if you sell just on
Amazon, just in states that have marketplace facilitator laws, yes this is great for you. But odds are that’s
probably not a lot of people because not a lot of states have these marketplace facilitator
laws and a lot of businesses are multichannel, but if that does, if you do, you know,
you’re located in Seattle and you only sell on Amazon, then yes, you don’t need to worry
about sales tax for Seattle. The minute you start to sell multichannel, then you still have a sales tax obligation outside of the marketplace. So these laws that are passed, we keep track of them on our blog so the link there is below. You can always find it on our blog, just doing a quick search
for marketplace facilitator. But essentially why these laws exist is that the states are having
trouble getting revenue. And it’s much easier
for them to put pressure on a marketplace than
to go and put pressure on all the different sellers
to give them their revenue. So if the marketplace
collects and and remits it to them automatically,
for them that’s way easier and way more revenue than going after the individual sellers. So today, there is not
that many states that have marketplace facilitator laws. My guess is that a lot more
states by the end of the year, and the next couple years,
pretty much every state will have one of these laws. But it’s really important in the meantime, because there are certain states that have not passed
marketplace facilitator laws to make sure you’re
compliant in those states. And certainly if you’re running
a multichannel business, to make sure that you’re
compliant and still filing sales tax returns for sales outside of marketplace facilitator laws. All right. I’m happy to answer any other questions. I know this is getting
a little bit tricky. So moving into, you know,
those are the two kind of, for a marketplace
seller, those are the two most important pieces of legislation that you should know about. I’m gonna talk to you a little bit about how TaxJar works and kind of how we help break those down. And then the technology piece behind it and figuring out how all this works and how to automate it because it is a lot of complexity and a lot of chaos, but we simplify it as much as possible. And we can really turn
sales tax into something that may be in the back of your mind, it may be something you’re worried about into something that’s fully automated and it is kind of on autopilot. So what TaxJar does and who
we are and kind of we do. We centralize all of your
business’s sales tax information into a single dashboard. So on the right here is a screenshot of what our dashboard looks like. When you connect to Amazon
or Shopify or eCommerce, all the different places you sell, we bring it all in into
a central dashboard because again, as I mentioned,
the states care about how much you collected in their state. They don’t care about what you collected on Amazon versus on Shopify. So if you are selling multichannel, you don’t have to combine
any of that in Excel anymore. It’s all done for you in this marketplace, or in this dashboard. Then we offer a product called AutoFile, which automates all of the returns. So you can tell us, hey in Tennessee I’m gonna file quarterly
and please file that for me whenever I have a deadline. The states will assign
you a filing frequency, so if you underneath this date, you see the quarterly,
semi-annual, quarterly. There’s different frequencies
in which the states want you to file and
you can’t control that. The state will assign that to you when you register with them. Typically, larger businesses
will file monthly, smaller businesses will file
quarterly, annual, semi-annual. Reason being the state
wants their revenue quicker, if you’re making more
money, they want it quicker. So when you’re managing sales tax, if you manage it in multiple states it can quickly become really burdensome because you’re having to
deal with all of these different due dates and all
these different frequencies. So we’ll organize all this for you and we send you filing reminders. If you are choosing to file manually, we create reports for every state that match the filing
website of that state so you can sit there and you can, kind of we call it our DIY option, where you can copy and
paste and file your returns in a few minutes. But you still have to remember to file and there’s errors that can happen. So it’s totally up to you
if you wanna use TaxJar and the kind of DIY method, or most of our sellers
will choose to AutoFile. And so that means that we
file that return for you and you never have to
remember to log in and file or handle all of that. For customers that are outside of Amazon, non-Amazon, we offer a sales tax API that helps with collection. So if you’re running, if
you’re starting to expand outside of Amazon and creating
your own customer cart, creating a magenta store,
something like that, we’ll handle the actual sales
tax calculation for your cart. But for most Amazon
sellers, you don’t need to worry about calculation because Amazon is already calculating. You simply need to set up
your sales tax settings within Seller Central to tell Amazon where to collect and then they’ll take care
of the collection for you. So at a high level, again,
you know we put your sales tax on autopilot. We have all the data that we’re importing from the places that you sell. We create the reports with
everything you need to file and since we have all the
data and it’s always updated, you might as well have
you file it with AutoFile. And then you essentially log in and you see this notice up
here that this is on AutoFile. Hey, for North Carolina your
July return is scheduled to be filed by this
date and you don’t need to worry about it. We upload a PDF of your return
into your filing history up here, so you can
always go in and check out what was filed, if you have any questions. We file the return and we
also file the payment for you. So we will send you an
email whenever you have a return that’s schedule to let you know how much we’re going to deduct so that you can make sure you have that in your bank account. We do not handle any of the money. We don’t store any of the money for you. It’s up to you, Amazon will pay you out with the sales tax. And it’s up to you to make
sure you keep that separate so that you don’t spend
your sales tax money and then don’t have the
money to be able to remit. So it’s passed-through tax. And it gets passed through to you and you’re responsible for
passing it through to the state. So this is AutoFile as I talked about. So your return and your payment
are remitted to the state. You have to enroll just once. You give us all your
credentials, we verify it. And then you essentially
never miss a due date again. So if you’re new to sales tax, you may have not had that
pain of missing a due date, but if you miss a due date even by hours, it can be $50, more than
that, penalty interest. It’s really, it’s pain
when you miss a due date. But we’ve all done it,
we’ve all been there before. But AutoFile ensures that you never do. And whenever you use
AutoFile, we actually, a lot of states will offer
a timely filing discount. So they’ll actually reward you for filing early and on time. And sometimes that’s, you
know, one, two percent up to a certain maximum. But a lot of times it can
cover the cost of AutoFile. So the state’s essentially
giving you money to use for AutoFile for larger sellers. So we remit tens of million
of dollars every, all the time across all of the states. And our accuracy is guaranteed. So if there’s ever an
issue, we stand behind it if we’re AutoFiling it and we’ll help you. Our support team is
really, really wonderful. I mentioned this again, but I just wanted to highlight it one more time. The sales and transactions checker, really, really recommend you guys use this to see where you stand. It’s up to you in
determining when you wanna comply with the state. Certainly the law says one thing, but you have to think about materiality and if I owe a state, you know, $5, does it make sense for
me to comply right now? Maybe, maybe not. It really depends on your risk tolerance. So a tool like this will
give you an instant look at where you have sales tax
nexus for economic nexus, and help you make that
decision really quickly versus spending time trying
to calculate on your own. So why choose TaxJar? There’s a few other providers out there that provide sales tax calculations. I’ll tell you a few reasons why now, but I’ll stress, and tell this
to all the sellers I talk to, is talk to other sellers and ask them. Because I can tell you, I
work for TaxJar obviously, so I’m very biased here, you know? I think that we’re wonderful
and I’ve used our solution for a number of years. But talk to other sellers and ask them. We hear it from a lot,
we are the highest rated sales tax provider on the
internet and also on Amazon, if you looked at the Amazon
External Tax Providers. We have, I think, 118 plus reviews. And so just read what other people say. That will really help guide your decision rather than me telling you. But if you’d like my
answer, number one it’s because customers love us. You know, we support so many businesses, so many marketplaces
today and people just have a great experience with
us because we’re honest, we’re here to support you. And our tool, it just works. No one want to be dealing
with a tool that doesn’t work. We’re built for the modern multichannel eCommerce providers, or seller. So if you are selling
across different platforms, many of you are just Amazon
today, which is great, but as you grow and as you
sell across multiple platforms, combining that data into a single source is super, super important for your own, kind of, headache and
peace of mind as a seller. So we have pretty much
one click connections to a number of different
eCommerce providers, and make it really simple. And then the last thing is
our truly-human support. So we’re technology
first, customer focused. We’re really easy to work with. If you have questions, we
answer a lot of questions for folks even if you aren’t a customer. So if you have anything you wanna ask us, just write in [email protected]
and we’ll make sure and give you the best
answer or connect you with someone that can help
you answer those questions. Lastly, again I recommend
going to taxjar.com/reviews. We’ll link you to all
the different portals where you can read reviews about us. We have tons of customers,
really great brands. So wanna just show you that you know, we’re a trusted resources in this space and we would love to have
and earn your business. Two ways to get started with TaxJar. So the question everyone
asks at this point is, you know, how much does it cost? We have two different plans and
two different service levels and they’re really for two
different types of customers. Our basic plan is our most popular plan for marketplace sellers. So it starts at $17 a month,
that’s for an annual plan. If you pay monthly, it’s $19 a month. The basic is really for
that DIY type of customer. So someone that’s probably, you know, anywhere from zero to $500,000 in sales, basic is really good for you. You can set up everything on your own. You can do the reports. You can file on your own
with our DIY solution. You can also enroll in AutoFile, but it’s really just access
to the tools and technology that you need, and then you’ve got it. And it’s email only support. Plus is our new offering
and this is really geared towards a seller that’s
doing significant volume and significant, they have a lot of nexus, a lot of complexity. They may have multiple platforms. This is where you got a team behind you to really make sure that
you’re setting everything up right from the beginning. There’s additional features
and service levels here. I guarantee up time,
those types of things. Most sellers at this point
are using multiple platforms. Again, we have ERP connections to things like NetSuite, so this is a great option when you’re ready and
really wanna make sure that you have a team
behind you making sure you’re set up correctly. You can contact our sales team. Taxjar.com/plus, for
any questions about that and we’d love to take you through a demo. Generally, if you’re a marketplace seller and you’re just selling
on a few marketplaces, basic is the right solution for you. It’s $17 a month, it starts
there for 1,000 transactions. We are transaction based. So the next tier is $49 a month for up to 5,000 transactions. The next tier is 10,000
transactions, et cetera. If you go to taxjar.com/pricing,
we list all of it. We’re very transparent
with all of our pricing so you can know exactly
how much you’re gonna pay. The cool thing about our pricing also, is that we help you, we
understand that certain businesses are gonna have seasonality. So during Christmastime
you’re gonna have more sales than you would in the
summertime for, for example, depending on your business. And so if there’s a month
where you exceed your plan, we simply charge you the
difference between that month and the month of the new,
the plan you should’ve been on that month. And the next month you go
back down to your other plan. So we don’t permanently upgrade you. We understand that you’re
gonna have differences in either month, so we
automatically calculate that. You never have to contact sales. It just happens seamlessly. So if you’re asking in
what cases should you be considering Plus when
your transaction volume is really high and growing,
when you have multi-state filing so you’re filing in 10, 15, 20 states. If you’re on multiple platforms
like a NetSuite or Magento. Or you need some kind of API integrations. We have a technical
onboarding team that helps with everything and getting
a Sandbox environment. So for most marketplace sellers today, this is probably not the option for you, but as you grow it’s something to know that we provide and that
we have for you guys. So helpful resources
just to wrap things up. So our YouTube channel, I
definitely recommend checking out. We have a lot videos on there. We post a lot of our webinars
and a lot of our education. If you have requests for
videos that you’d like to see from us, please let us
know via our support channel. We’re always trying to make sure that our video content there is the most helpful for sellers. Salestaxcommunity.com, so
this is a link that will guide you over to Facebook. We have a private Facebook group. And it’s pretty much everyone
talking about sales tax. So this is sellers, and also CPAs, professionals within this space so you can get some really,
really helpful tips and tricks from other people surrounding
sales tax in this, over 9,000 folks within that group. And then our blog, we’re the highest rated and highest viewed sales
tax blog on the internet. So that may a small category to some, but we have really, really deep content. People have ranked us
on the accounting blogs because we really cover
everything sales tax and we help provide as much info as we can to folks that are on,
anything that’s relevant and going on within sales tax. And that’s it. And I put the link to our
support team on the bottom. If you have any questions,
love to hear from you. We offer a free 30 day trial for anyone. So if you have questions
or wanna get started or even try that sales
and transactions checker, recommend starting a free trial and seeing what TaxJar is all about. So that’s all I got, Robert. – [Robert] Lizzy, absolutely fantastic. I love the fact that we can turn something that a lot of people
consider sort of boring all those sort of things into
something so interesting. And you know, whenever we’re
looking here at this too, I love the fact that whenever you have an in depth presentation like that, that is quick fire, straight to the point, concise as well, all inside
around about 30 minutes. And the number of questions that we get are relatively low, that
means that the material inside here is absolutely
A1, it’s stellar material. And thank you so much
for putting all of that together for all the Heroes. And we do have a few
questions, which we’ll get to. The other thing as well that I wanna say is whenever you’re connecting with TaxJar, I’m just going to put a
link into the chat box here, which I believe, Lizzy,
is taxjar.grsn.io/mpsh. That just allows TaxJar to
know where you came from. You’ve come from marketplace. And then as well whenever
we’re doing anything together, collectively we’re able
to bring all of our Heroes together because then
they know who we are. We’re very, very similar avatars here. The vast majority of us are
doing exactly the same thing, but maybe on a different level. So therefore it allows
them and it allows us at Marketplace to get everybody together and go to TaxJar and
get something from them. Whether it’s a video or
some sort of material that everybody requires. So that’s fantastic. The other thing I would say is, you know, we get a lot because of our
European connection here. A lot of people talk
about VAT being complex, but wow, you know, sales tax takes it, it really does take it
on to a whole new level. So I’m glad to see that actually, because I almost thought,
you know, it’s like VAT is like the killer thing in the mind. Now you just made it so simple now that whenever we talk about it, it should be really, really easy. And I think, too,
something that you covered very, very well was certainly something that everybody has to
really bear in mind here. Much like VAT, sales tax
is not a profit killer. It is a pass through
tax that the government are putting on to certain product. It is on the end consumer,
that’s all it is. But it’s about doing it right. Whenever you don’t do sales
tax or VAT for that matter correctly, then it can
be very, very hurtful. So utilize experts. We always talk about utilizing experts. We talk about, you know, you don’t make the products yourself the
vast majority of the time. You employ experts who have factories. You don’t ship the goods yourselves. You employ experts who
have big ocean liners. You don’t do your own customs. You rely your customs agent to do that. And the whole way through the process, you don’t do your own accounts, at least you shouldn’t be
because as Lizzy mentioned, if you’re getting involved in those part and those tasks of your business, you’re missing a real trick. You should be concentrating
where you’re the expert on your research, connecting
with your suppliers, getting your listings done,
looking at your numbers, making sure that your
management is correct and you’re staying in stock. That’s where you make
the most amount of money. That’s where you make the
most amount of profit. You make nothing, you actually
have an opportunity cost if you start doing this yourself. And if you look at the
very low monthly costs or expenses that you
have with the software and a technology solution such as this. So thanks again, Lizzy. And if we can just get
into a few questions that were there. – [Lizzy] Sure. – [Robert] And we’ll go through them. The first thing was,
you mentioned that you have to register at each state
to collect and remit tax. Somebody mentioned that there was a, some thresholds for states,
or maybe it’s different for each state. Could you just clarify
whether that’s correct or not? – [Lizzy] Yeah, so with economic nexus, those are the thresholds that folks are probably referring to. So when we back up and
when you think about where you need to collect sales tax, it’s that decision of
where you have nexus. So there’s a physical part
where you have a nexus due to an Amazon FBA warehouse being, your goods being stored in that state. And if you have goods stored
in a warehouse, you have nexus and that’s kind of, it
doesn’t matter what your economic threshold or
economic activity in. If you have that physical
nexus, then you have nexus. Or if you have economic
nexus, you have nexus. There’s no either or there. If you have one, you have it. So if you don’t have
physical nexus in a state, if you do meet those thresholds, then you have economic nexus. But if you’re below the threshold, so if you have no physical
presence in Ohio, for example, and you don’t meet the threshold in Ohio, then you have no sales
tax obligation in Ohio. So it’s really getting back
down to where you have nexus. And if you have physical, you have nexus. If you have economic, you have nexus. If you have neither, then you’re good. But there’s not one or the other. You know, if you have physical,
but you don’t meet economic, you still have nexus, you’re not exempt because you don’t meet
the economic thresholds. And there is no threshold. People will say, oh if I
make under a million dollars I don’t need to collect sales tax. Those are myths. Those are not founded in anything. The laws are pretty clear. I mean, if you think about it, the states want this revenue. And so they’re trying to
get it any way they can. So they’re very aware of Amazon and FBA. And that’s why they’ve
written in their laws things like inventory stored
in a third party warehouse being shipped to customers. It’s pretty black and white. But with the economic nexus changes, it did not displace any
physical requirements that still exist. – [Robert] Yeah, certainly those myths, it’s always good to bust because you know, whenever it gets down to
government and compliance, trying out the lesson to
some people who are doing a YouTube video or somebody
who’s posted something or you’ve asked some other seller, go direct to source. Go to an expert who knows exactly what they’re talking about
so that you’re getting the government aligned. Whether that be in the US or the UK, or anywhere where your
selling, that’s for sure. Another question there about the marketplace facilitator states, they said like Washington state, do you have to still
register with that state if you only sell on a marketplace? – [Lizzy] It’s state by state. Generally, no. There are certain states
that will require you to register and essentially
file zero dollars. But generally, no. If you are currently already registered, there are ways to switch
your status to inactive if that affects you and you were currently compliant in the state. There are guidance from
certain states on that. But generally, generally no. And I think, to the question before, the thing that we wanna get across is, especially for new sellers and sellers that are getting into this is the concept of materiality is really
important and using common sense. So if you’re looking at
this stuff and you owe one dollar to all these different states, if the cost of compliance is greater than kind of the risk of getting caught and having to pay all
the penalties and fines, then maybe it doesn’t make
sense for you to comply. I’m certainly not recommending you to, you know, disobey the
law, but think about it and look at your liability in these states to make sure that it’s worth it to you. And kind of manage it on a
risk basis, if that helps. – [Robert] Cool, and just one other thing on marketplace facilitator states. We may not have the
answer to this right now, and we can always go and find it out. But have some of those
states defined Shopify as a marketplace facilitator? – [Lizzy] I’ve not seen anything yet defined Shopify as a
marketplace facilitator. They’re kind of on the
platform side of things. The marketplace facilitator
has some pretty strict requirements around collecting,
facilitating customers into providing advertisement, providing third party
fulfillment resources. So some of those things Shopify does, but I have not seen Shopify adopt or gonna be targeted with any of the marketplace
facilitator laws thus far. – [Robert] Cool, well
we’ll keep an as well. Whenever you follow the
blogs and you follow some information, we’ll
get it in from TaxJar, we’ll make sure and
put it in for everybody inside the group. Whenever there’s updates
and different things, which you know, whenever
governments get involved they update things quite regularly. Especially whenever it
comes to them collecting more tax dollars and tax
fines, they are all over it. But that’s just the way they are. And a number of people
were asking, you know, if you started your
business a little while ago, let’s say three, six months ago. Is TaxJar able to sort of backdate and go backwards inside your Amazon API to collect older ones? – [Lizzy] Yup, that’s a
great question, we do. So in the trial period
you’ll get the first 60 days of data. So that’ll be able to just kind of give you a preview of
what our software does. If you’re actually ready
to become a customer, we go back to the first of the year. So that will go back to
January if you subscribe today. For I think it’s the
same price as one month, we’ll go back, for
whatever plan you’re on, we go back previous years. So you can say, I wanna import the last three years of data and we’ll
calculate all the reports and you can just pick the
little date range checker and go backwards. On a case by case basis,
sometimes we can help AutoFile previous returns,
but generally you’ll need to manually file those returns because there’s a lot
more penalties and fees associated with overdue returns, if you’re looking to do that. If you haven’t been
compliant and you are making a significant amount of money, there are also options for you. One of those options would
be to work with an accountant and set up a voluntary disclosure
agreement with the state. So you could go to California and say, you know, I’m making X million dollars. I haven’t been compliant. I’m wanting to be
compliant moving forward. And they can kind of anonymously negotiate with the state to potentially come up with an agreement on, like sometimes they’ll
cut the interest by 50%. And you pay just one lump sum, and then you’re compliant moving forward. If you haven’t been compliant in the past and you register, there is a chance they can look backwards and go back, typically up to three years,
sometimes it’s five years. But it’s about three. If you are not compliant
and not registering and they catch you,
they can usually go back to the very beginning of your inventory. So seven, eight years. So by registering, sometimes,
you know you have to pay a little bit to kind
of clear your history. But it’s better, once
you register you lock that lid back in to three years versus potentially a much higher liability if you get caught. So there is letters that come from Amazon, I don’t know if anyone
knows what it’s called or received them, but they
oftentimes will send letters asking you, or telling you
that they have verified that you have their
inventory in their state and need to comply and
some instructions on that. So once you get a letter,
you typically have about 30 days to negotiate with the state. And after that, if you’ve
been ignoring those letters, they typically are unwilling
to kind of provide. – [Robert] Yeah, and you know that’s the, that’s one of the big reasons why inside every single Heroe’s
either 4S product gauntlet or your profit calculator that we provide, we do align for that average. You know, as Lizzy was
saying, there’s a lot of different states, a lot
of different percentages. We do allow for that seven percent, so that you know, if you
have got sales in the past and your profit figures
are showing inside 4S or profit calculator,
it’s already built in. So if you did have to go
and backdate a little bit, you’re still in profit. But make sure, keep yourself
compliant at all times. That really is the advice. A real quick one, Lizzy, that you may or may not know, we can get answer to. Does TaxJar have a connection
to like Quickbooks or Zero, you know like an outward API? – [Lizzy] Yup, so we do
have a connection to Zero. I will say that it’s
right now being redone. So there are some limitations to the Zero integration that’s available today. We’re launching that later this year. And we are launching
Quickbooks later this year. So not today, but coming soon. It’s one of our top requested
channels, is Quickbooks. – [Robert] Great, great stuff. Just a little sort of
a kind of specific one, but whenever you would sign up into TaxJar and for whatever reason, you don’t, you don’t have a nexus
anywhere, let’s say. And I know that will be very, very rare, what would the scenario be there? I mean, from my perspective
what I would do, I would just keep it
there because Amazon’s always moving stock. You don’t know when they’re gonna put something in another
warehouse or get you to move. And you’re gonna be on
pretty much the most basic package that TaxJar offers, which is then almost like
an alert system for you. I mean, that would be my take on it. What would you have on that? – [Lizzy] Yeah, so we
have a lot of sellers that use TaxJar kind of
as a liability dashboard, that kind of take a look at, so if you are not compliant in a state that you have nexus and you have sales in, we calculate the amount that we estimate you should have collected. So that will tell you, okay, the liability in this state is three
dollars or it’s $15,000. So you can kind of use
TaxJar as your dashboard to look at that. I would say, it would be pretty rare that you didn’t have nexus anywhere. The circumstance in
which that would happen would probably be if you
were an international seller, so you didn’t have any
physical presence in the US. And you are not using FBA. If you’re using fulfillment by merchant, sending things internationally, you probably wouldn’t
have nexus in the US. But if you’re using
FBA and you have sales, you will have– – [Robert] 99% you’re gonna have a nexus. That’s pretty much for sure. And in terms of TaxJar
registering the business in each state, how does the
service that you provide and is there a generic cost to that or a straightforward cost
or does it depend by state? – [Lizzy] Yeah, so there’s a
link I would direct you to. It’s called TaxJar.com/helpme. And if you wanna paste
that in the chat, Robert, that is our registration. We do not do the registrations in house, but we partner with CPA
firms that do it for you. So if you fill out that form, it’ll direct you immediately
to the firm that does it. It costs $100 per state. And that is not including, some states have like a 20, 30, $40 fee on top of it to register. But generally, it’s around $100 per state for their services. And they’ll help you get set up. And they’re familiar with TaxJar and FBA, and they understand fully
kind of, what you need and how to get you kind of registered and back to TaxJar. They also, on that link at the bottom, offer on our blog a list
of all the different states and how to register. It’s not very difficult to register for a sales tax license on your own. It really depends on your time. Though some states can be,
you know, 10, 15 minutes. Some states are a little bit more difficult and challenging. But I would certainly, if
you’re an international seller, I would reach out via that link because there are some
additional requirements that might be difficult to register for. – [Robert] That’s pretty
cool because that just links me in to the last
question, which was asked about, probably about 50 times. So that’s good. It’s one of those ones,
really what we’re talking about here is an international
company or trader. So we can use some examples here, like say a Canadian company, a UK company or a European company, or be even an Australian company. They’re sending their goods
into the continental US. They’re moving them into
Amazon’s fulfillment center. So in my opinion, you
know, I would almost say that is creating a nexus for that company. Would you agree with that? – [Lizzy] Yeah, and that’s a question, that’s the number one question we get from sellers outside of the US is, do I actually have to
comply with sales tax law? So the laws are written
in that it is not only applicable to US citizens,
it is applicable to anyone with this activity within the US. So technically, yes you are liable, the same way someone located in the US is to this economic nexus and
the physical nexus laws. The question around, you
know, it’s certainly difficult to find you if you are outside of the US. It’s way easier to get someone if they’re inside of the US. But the things that the states will do is they will confiscate
your inventory from Amazon, and so that is, you
know, painful depending on what you’re selling. They can go and actually
just take what you’re selling from the warehouses. And if you have any bank accounts that have branches within the
US, so if you’re, you know, I don’t know, using BBVA
or something like that and they have a branch within the US, they can access your funds from the banks. But if you are kind of off the radar and you want to risk it, it’s certainly more
difficult to find someone internationally than they are in the US. But we recommend kind of, you know, you have to think about
your own peace of mind. And if sales tax is something that is causing you stress
or causing you concern, certainly as your business
grows and if you have, you have a desire to grow your business, it’s something that you wanna comply with. The other thing to think about is kind of why you guys are
starting Amazon businesses. A lot of folks want to
create supplemental income, leave their nine to five’s. If you’re creating a
business for the end result of being able to sell your business, sales tax can be something that
will actually kill the deal. We’ve seen folks that are trying to sell an Amazon business with
really healthy profits. Because of the sales tax liability and acquisitions and also investors will walk away from deals because it’s, sales tax is something you can’t avoid. And it’s a serious kind of
line item on a business. So we recommend, you
know, certainly choose whatever path you’d like. We’re the technology provider. We will give you the data
to make the decision, but we recommend complying
just for your own peace of mind and to make
sure that you protect your business in any
regard, follow the law. – [Robert] Yeah, absolutely. And I couldn’t (muffled speaking). We’re all about compliancy here because I always, I say if you’re trying to game the system by
trying to around something, trying to stay off the radar, and that’s the way that you
wanna run your business, I would say that your business belongs with the circus and the juggling clowns. You know, get yourself
set up and get it set up as soon as possible because then as you go and you start to build and you go forward, you’re building your business in the rock. You’re not building it in the sand which will just all over at some stage. Be a real business and therefore
make your business real. Just one very, very small point, Lizzy, just before we go. In terms of making payments,
so let’s say that you are an international company and you’re making a payment to the state
that you have incurred or your passing the sales tax through. How does that work? Is that gonna be an international payment or is that something that’s
done through TaxJar’s system? – [Lizzy] It is not something that’s done through TaxJar’s system and
it is a pain point for folks. They typically have to figure out a way to pay the state. So we pass over the bank
account information, like the ACH to the state. We don’t actually hold
any funds on your behalf. – [Robert] So it’s something
like a transfer wires, or a OFX or an international
payment provider? – [Lizzy] Yeah, there’s
a lot of conversations. We don’t have a specific
provider we recommend today. If you, when you do fill out that form on TaxJar.com/helpme, if
you’re looking for help on the registrations, if you check the box on international, we’ll send you to a firm that handles specifically
international sellers getting registered in the US. And I know they have done some work on behalf of their clients to be able to pay on their behalf. So they help cover that issue. But it’s definitely a challenge. And there’s you know, some work arounds. – [Robert] Lizzy, thank you
so much for your time today. It was, I mean I’m
getting a lot of comments inside the question
box about how wonderful the present was and knowledgeable
you are on the topic, which I would expect to
be quite honest with you. (audio cutting out) And everything else you’ve
covered in questions. I always like to try and stump somebody, but it’s always great
whenever they do knock it stump to tall, which is superb. It just proves just
how good the service is and just how great you
were at that providing everything for us. So thank you much. – [Lizzy] Thank you. – Again and if anybody needs the link in terms of Marketplace Superheros
it’s TaxJar.grsm.io/mpsh. We’ll put that out in the
replay as well as in our group. – [Lizzy] Yes. – [Robert] Thanks again, Lizzy. It was much appreciated. And I look forward
– Thank you so much. I appreciate it.
– To having you on again. – [Lizzy] Yeah, thank you for inviting me and best of luck to all the
Heroes and future Heroes. We look forward to helping you guys with everything sales tax. So appreciate you having us. – [Robert] Thanks, Lizzy. All the best. – [Lizzy] You too, bye bye.

Comments (1)

  1. I watched a video about (how to file sales tax for California) on your channel and the video was really good and helpful.
    Do you have instruction videos for other states like (MS, CO, MD, MA, TN, VA, NY, CT & DC)?
    If you have like this great instruction videos on those states It will be much appreciated if you just give me the link for those videos in reply to this comment.
    Thank you

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