There are a lot of emotions involved in being a business owner, but uncertainty seems to be the most pervasive of them all.
Will your customers respond to your product or service? Will that new marketing initiative be effective? Are you making the right hire? Will your business ultimately be successful?
When you’re charting so many new territories, maintaining your confidence can be challenging. However, recent research reveals that there’s one area where small business owners feel extra uncertain.
What exactly is it that’s undermining their self-assuredness so severely? Sales tax.
Small business owners doubt their abilities to manage sales tax
The Sales Tax team at QuickBooks conducted a study of 600 American small business owners, and it revealed what most people already know to be true: Navigating sales taxes can be a major stressor. For many business owners, it resembles a big, complex guessing game.
43.5 percent of study participants stated that the process of managing their small business sales tax is only somewhat clear, while 9.3 percent say that it’s not clear at all.
But beyond the ins and outs of actually collecting and managing this type of tax, small business owners also have serious doubts about the math involved. 8.2 percent of respondents said that they are not at all confident in their sales tax calculations.
That level of uncertainty is nerve-racking, especially since screwing up these numbers can mean needing to owe a large sum to the government when you realize you didn’t actually collect enough sales tax from your customers (which is likely going to come out of your own pocket).
Small business owners are unaware of important sales tax changes
This lack of confidence in their ability to appropriately manage sales tax inspires most business owners to distance themselves from the topic. However, that only means that they miss out on important updates and changes that could have major consequences for their businesses.
One of many is the case of South Dakota vs. Wayfair, in which the Supreme Court ruled in favor of South Dakota on June 21, 2018. This decision meant that any seller outside of South Dakota must collect sales tax from purchasers located in the state if:
- They deliver more than $100,000 of goods or services within South Dakota on an annual basis OR
- They have 200 or more transactions within South Dakota on an annual basis
This ruling overturned the long-standing physical presence rule that many business owners had become familiar with, and it also set the stage for other states to establish similar laws (if they haven’t already).
Such decisions can (and will) impact the amount of sales tax that businesses need to collect from customers depending on where they’re located. That introduces a new layer of complexity in regards to tax collection, which is why the same QuickBooks study revealed that one in five business owners feel “very concerned” about the decision.
But despite the fact that this type of change has direct impacts and warrants that level of worry, a surprising number of business owners were actually completely unaware of the ruling. Only seven in 10 respondents even knew that such a decision had been made, leaving 29 percent clueless about the changes that will undoubtedly impact their businesses.
Increase your sales tax confidence (and compliance)
Without a doubt, sales taxes can feel like a maze for most business owners. And, when you’re already spinning so many plates, the last thing you want to obsess over is whether or not you’re maintaining sales tax compliance or collecting the right amount.
Fortunately, there are tools and resources available to help. The QuickBooks Sales Tax Calculator helps you say “goodbye” to that dreaded guessing game by helping you identify your custom sales tax rate with just the click of a button.
Simply enter your address, and the calculator will immediately generate the rate that you should be collecting. There—consider it one less thing you need to feel uncertain about.
(Featured image by Satori Studio via Shutterstock)
DISCLAIMER: This article expresses my own ideas and opinions. Any information I have shared are from sources that I believe to be reliable and accurate. I did not receive any financial compensation for writing this post, nor do I own any shares in any company I’ve mentioned. I encourage any reader to do their own diligent research first before making any investment decisions.
How injecting trillions into the economy may favor Bitcoin
Bitcoin has had a 25% drop in the last 30 days. However, the cryptocurrency may be on a very positive...
The corona crisis increases demand for loan via Fintech platforms
The Brazilian Fintech sector is developing in the light of the new coronavirus pandemic. A large number of companies now...
3 business intelligence trends to watch for in 2020
The Business Intelligence (BI) market will reach $40 billion by 2025, according to Research and Markets. The world economy is...
Agreement on the prices of medical cannabis in Germany
The costs for the health insurance companies in Germany, due to the drug price regulation, experienced a 100% increase. After...
The tourism sector in Spain asks the government for real help
The tourism sector has already practically lost the summer and expects that recovery will be much slower than previously estimated....
Featured5 days ago
The pandemic is just the trigger of an inevitable recession
Africa6 days ago
Angola might devalue the kwanza, as the country’s economy is threatened
Featured5 days ago
The winners of the Online F10 FinTech Hackathon 2020
Business6 days ago
Real estate is at risk because of the exogenous crisis caused by COVID-19