Many writers and authors are either confused or not aware of their obligations when it comes to sales tax.
Writers are not the only ones who are at a loss about the whole sales tax confusion. It isn’t straightforward and requires a lot of studies to understand how it works.
One of the reasons why sales tax is so complicated is that sales tax laws are continually changing as states continue to review existing laws and enact new ones.
If you are a writer who has a business presence or nexus in a state, then the law requires you to collect and remit sales tax on your books to the appropriate authorities. Determining whether a writer has a business presence in a state is not clear cut.
For some states, a writer has a business presence if the writer has some physical presence in that state. Writers who live or sell their books in a state must comply with sales tax laws.
Other states have passed laws that mandate writers who sell their books online to collect and file sales tax, although they have no physical presence there.
To avoid problems with tax authorities, here are some sales tax tips for writers.
See a Tax Consultant.
For writers who live and sell their books in a state, there is little difficulty determining their sales tax liabilities. It is the sales tax laws of the state where you live and do business that will apply.
A sales tax consultant is your best bet in determining your sales tax liabilities. Hiring a sales tax consultant will offer sales tax support by helping you in preparing and filing your sales tax documents, among others.
Register Your Business.
Registration of businesses is mandatory in all states. Writers should, therefore, apply and register their businesses, whether physical or online, to enable them to collect and file sales tax returns.
Writers travel a lot. In their travels, they enter into some transactions that create sales tax liabilities for their business.
It is, therefore, important that writers find out if their travels and conducts outside their state of residence have created a sales tax nexus in the states they went to.
File Your Sales Tax On Time.
Most states sales tax laws provide a time frame within which businesses should file their sales tax returns.
Writers should, therefore, find out the due dates for filing sales tax in each of the states where they have a business presence.
The cost of not filing or late filing of sales tax can be high, as you may put your business at risk for an audit.
Study Sales Tax Laws.
Sales tax laws and rules are regularly changing, especially for legislation on web sales tax that affects writers doing online business.
Writers must, therefore, be abreast of current sales tax laws and how they affect his/her business.
Always Add Sales Tax To The Purchase Price.
Many writers who use different payment portals to sell their products should not forget to include sales tax to the purchase price.
Remember, it is the business owner that is responsible for collecting and remitting the sales tax to the authorities.
Finally, remember that sales tax is here to stay. There is no running away from it. Sales tax is a fact of retail life for book writers in many U.S. states. To avoid the closure of your business, writers should collect and remit the correct sales tax on their books and other products.