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Sales tax for online transactions could cause confusion, lawsuits

On Behalf of | May 18, 2020 | IRS Issues

Running a business means adding many new tax obligations. Some people may have a difficult time keeping up with their personal tax responsibilities as it is, and it can certainly be hard to manage business-related tax matters as well. If Atlanta small business owners are not careful, they could end up facing lawsuits regarding a lack of sales tax payments.

In particular, small business owners need to pay attention to the sales tax they collect and pay on internet transactions. These days, making sells online is commonplace, but the rules relating to sales tax are still confusing to some. In fact, laws allowing states to collect sales tax for out-of-state transactions only went into effect in 2018, and future changes to those regulations are likely.

In efforts to stay out of trouble with the IRS, business owners would be wise to understand how state laws apply to their businesses. In some cases, companies that conduct fewer than a certain number of transactions in a particular state may not have sales tax responsibilities. However, even if companies do not conduct a considerable amount of out-of-state business online, it is important to understand those tax obligations.

Some Atlanta small business owners may have found out the hard way that they were not meeting their sales taxobligations. Now, they may be facing legal action from the IRS and wonder what they can do. Fortunately, like with any legal matter, business owners have the right to defend against any allegations and can better understand their legal options by consulting with knowledgeable tax attorneys.