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How to Simplify Sales Tax Compliance for Your Online Store

How to Simplify Sales Tax Compliance for Your Online Store

Taxes can be stressful and complicated, especially for online merchants with a global reach. In this article, you'll learn how to automatically calculate sales tax for every transaction on your site using Avalara.

What is Avalara?

Avalara is a tax software system that instantly calculates sales tax rates, reducing the time you spend on tax-related activities by 50% or more. There’s no longer a need to rely on ZIP codes or rate tables because your sales tax rates are updated and calculated based on the most current rules worldwide.

Manage your sales tax

As an online merchant, the products in your store need to be taxed correctly. Keep in mind, every state where your store sells and ships to can establish nexus and collect sales tax. Furthermore, each state has its own laws for what establishes nexus and therefore requires you to register, collect and remit sales tax.

Here’s where it gets even trickier. Sometimes it’s difficult to know which tax category your products or services fall under. For example, let’s say your online store sells baking supplies and patisserie lessons. These items can be taxed differently depending on the products’ use, materials and more. In this case, you may need to create separate tax groups for the goods and services you offer.

What about digital products? In general, digital goods include audio files, video and digital books. However, in the U.S., what's considered digital products may depend on:

Varying definitions, or lack thereof, across state lines can make understanding sales tax of digital products especially complicated. With an automated tax system, tax calculation for your business is hassle-free. All you have to do is add the states you do business in.

Follow these 5 simple steps to connect your Wix online store to Avalara:

  1. Log in to your Wix account.

  2. From your Wix site dashboard, click Settings.

  3. Select Store Tax.

  4. Click Get Automated Tax on the top right.

  5. Click + Add Country to add the regions you sell and ship anywhere in the world. Avalara will automatically calculate the tax compliance rate for each geo you add.

For home rule states, or Canada, learn more about how to set up Avalara for your online store.

Take the guessing out of sales tax calculation, streamline the way you manage your taxes and focus on growing your business.

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Daniella Dukes

Payments Team Lead

Daniella leads the Payments Marketing Team for Since 2019, she's been crafting sharp content that helps over 700K Wix Merchants get paid, wherever they sell—online, in person and on the go.

In partnership with Avalara.

Source: 10 Signs of Sales Tax Trouble by Avalara | Updated 11.01.2019

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