Surviving Sales Tax Banner

Surviving Sales Tax in the Digital World

Surviving Sales Tax Banner

Anyone who deals with business of any sort, especially in the United States, knows that since businesses started to move online, sales tax laws weren’t broad enough in scope or complexity to handle this form of business interaction. At first many states more or less hand-waved it because, I suppose, it may have been too much effort for too little gain in the beginning of things?

Now states are suffering because many of the businesses income is coming from the internet. A year ago about 15% of sales were from the internet. This may not seem like a lot, but when you are talking about 15% of all sales tax on millions of dollars in retail sales is a lot of money that the states are loosing. So in 2012 there has been a big push to compensate and try to fix the this loss.

Online Sales Tax?

This issue actually is based on the basic idea of “where” a sale takes place. Up to now most retailers weren’t required to charge sales tax upfront for online sales as they would at a brick-and-mortar store. Online there really isn’t a “place” where the sale is processed, unless one wants to get nit-picky about where the physical server is located, or maybe where a physical store or distribution center might be found. So a lot, and I mean a lot, of people flocked to the various online stores for what they considered a “savings”.

Now, it is my opinion of course, but I believe this is one of the reasons the economy in so many places began to tank. Sales tax on items goes into the state’s governmental system and helps pay for things from schools, road repairs, public works, politician paychecks and more. Now some states do not require sales tax of any kind, but they have a financial structure that copes with that lack of income. Other states do not and they suffer for it.

Different Strokes for..

That is another important point to consider, and also why collecting sales tax online is so mind-boggling complex. Each State has it’s own laws, limitations, and requirements. There may only be only three forms of sales tax requirements (point-of-sale, use tax, destination), however because there are 50 states with multiple different laws in effect, it gets dicey.

Companies are no longer limited to brick-and-mortar stores, where before they had to worry about where these stores were located and thus abide by that state’s sales tax laws. As they are now a world-wide seller of goods and services, the question then come to the “how” do they get taxed?

The three basic types of sales tax are; point-of-sale, use tax, and destination based sales tax. As they are different in their approach (use tax is paid by the consumer, while point-of-sale and destination are paid by the company), they can cause conflict in how something is taxed.

Added to that, each state allows for some things to be taxed while others are not. This is the biggest part of the problem with online sales tax.

Some states’ laws are a bit more specific and have actually gone after affiliates. These states are claiming that affiliates who live in a given state thus represent the company by acting as a point of sale for a given taxable product. In other words, the physical person becomes the physical presence that some states require to collect sales tax from sales.

Amazon actually canceled a number of contracts with California affiliates (among other states) because of this requirement.

So Why Is This Important Now?

The Tax Revenue Service is stepping up it’s efforts to go after businesses that are non-compliant. This includes smaller businesses, like the artist who sells prints of their works online from their personal website. Or a freelancer who works out of their home office (some services are taxable!)

If you work through a separate company, it is imperative that you double check their policy on sales tax. Don’t just scan the TOS, read it! Etsy, for example, puts the responsibility of taxing the customers on the shop owner.

If you don’t handle the issue of taxes with a serious heart and mind, you could get audited. A severe enough audit can shut down any business. The government caught Al Capone on a tax audit discrepancy. So don’t think it couldn’t or wouldn’t happen to you. Be prepared.

What to do?

Larger businesses often have their own accountants who are in charge of overseeing this sticky tax issue. But what about smaller businesses? Or the lone artist, artisan, craft-fair vendor, or freelancer who knows nothing of the various and often complex tax codes? There aren’t many options beside educate yourself and keep up to date with the various court cases, and law suits that affect the large companies.

It’s these legal proceedings that determine the end-result laws which are then put into place to govern all businesses. With how vast and complex the internet has become over the years, this information isn’t too hard to find. Your best bet however is to look for the small-business journals, and if you don’t understand something then leave a comment on the article.

Also, double check the post date of these articles. What may be applicable today may not be applicable 2 months from now.

One such website for the Web Designer (Website Magazine) has published a pdf file talking about this specific issue. It is sponsored by a tax-program AvaTax, just to be aware. However, a point they make that I feel is very important is to automate your tax collection systems and be sure that any online sales carts give you options to adjust for specific sales tax needs of a given state.

Why automate? Running a business by yourself, especially for freelancers, means you are working in various different positions at different times. Why put more work on your shoulders, and more hours required in your day, when you can get the help of today’s technology to stream line the process? The sooner you get a system set up to handle this, the better as it then reduces the over all amount of work you’ll have to do.

There are more programs out there, some free for a trial period, other free as a low-end option. All of them are worth looking into to help the small business owner keep “above the board” when it comes to taxes. Why suffer later for what you can prevent today?

The programs I list below are not the only ones, but they are ones I have had at least some personal experience using. Or they are by companies I have found helpful in the past.

  • Turbotax has a business tax software bundled with a tax prep program.
  • Outright has different levels of accounting software (online) depending on your needs and desires.
  • Consumer Rankings offers a list of the top most popular tax programs.

Is there an online tax program that you use? If so please feel free to leave a comment with a link! I will be collecting these as a separate post.

Resources:

 

3 Points of Interface Design.

3 Points to Consider for Good Web Site Navigation

3 Points of Interface Design.

Navigation is the most important part of a Web Site!

When in the course of the web site development process, designing the user interface of a web site is vital to the life of the site. Regardless if it is a gallery, product-pushing sales sites, fan page, or a blog, without a good menu your users are lost.

Seriously, how can they find areas of your site unless you have a way to get them there? The answer is either they don’t, or your SEO is so amazing they find it in a search. That isn’t really the best way to go about it, now is it? Of course not, which is why navigation design is so important.

So, what makes for a “good” or more professional menu navigation on a web site? I discussed this in a previous article, but wanted to visit it in a more “tl;dr” (too long; didn’t read) friendly format. In short, this is the short version.

1) Find Me! - Clear, highy visible, easy to understand navigation/menu options.

Aside from the website brand itself, and secondary to the need of the user’s initial understanding of what the site is about, being able to spot the menu is top of the list. Don’t hide it. Even with mobile devices there are ways to make sure a user spots the menu, and more importantly that they understand that it is a menu!

2) Reduce the Clutter! - Keep your menu design simple and to the point.

Simple navigational aides are the best. Only sites that absolutely need multiple-level, massive menu options should ever have them on their sites. Based on the focus of a web site, choose the four to six (4-6) most important sections (pages) of a web site to be the main navigational links. All else is more easily added as secondary, side-bar, or footer navigational menu items.

3) Place Me First! - Figure out ahead of time where on the site the navigation will reside.

Because the menu is so very important, make sure you figure out where it goes first. Will you have it in the header under the branding of the site? Will it be part of the logo in the header? Are you designing for a left or right floating navigational menu? Will the information find itself in a static, absolutely position bottom footer-like bar?

Figuring out the navigational needs of a site will help to to understand how to best design the interface.

Header Banner for SEO and Google Article.

SEO and Google

Header Banner for SEO and Google Article.

While working on furthering my personal education in typography I tripped over a very informative site that linked to several articles, downloadable pdfs, and websites that related to design and typography. This lead me into a tangential flow to this article on Smashing Magizine. Smashing is an excellent source of design information from every aspect, and a place I highly recommend to any designer to bookmark!

They have a download-able pdf on how the Google search engine does it’s “thang”. It is rather insightful and a highly recommended download! Why pay out of pocket for this bit of very valuable information? Quick, go get it, what are you waiting for?! Oh still reading? Okay than but don’t forget to grab that download.

 

The Devil is in the Details

Google’s algorithmic code is very well crafted to keep people from “cheating” by key-word stuffing and other such tricks. As Google is one of the major search engines it makes sense to pay attention when they change their code, and how.

Basically, as I had mentioned in a previous article I wrote on the topic of SEO, much of what Google does is based on content and relevance of links. Keywords do make a difference, but it is a delicate balance. Too many of irrelevant keywords can get you flagged by Google’s system. Too few and you won’t rank high enough.

Wait! What? Didn’t the document just stated that Google doesn’t actually count content?!

Ah. But here, my friends, is the trick or better the truth behind the trick.

 

Content Equals Link Power?

Content draws visitors, and some of those have websites of their own that might link to you. Link power from Backlinks are the core (currently) of Google’s engine churning out your site in the top ranks. So, by having regularly updating content you increase the chances at better traffic flow through your site. This finally, in turn, increases the chance of better links. Potential virile viral backlinks!

Every site has a link-weight (importance) that Google assigns it. The more power a page has in terms of link-power, the better it is to get a link from it to your site (or page!) See the downlaod for a better picture on how this works! It’s amazing!

One way to garner links from these “power sites” is by writing articles or providing other kinds of specific content to them, sometimes for them alone. In some of these cases this requires you to apply to the site or company as a content provider. In other cases you might find yourself asked to provide content. This is a win-win situation, regardless if your application is accepted or you’ve been personally asked to provide content. It gives them content that in turn helps to keep the site fresh and new, and in most cases they will allow a link back to your personal site.

This gives you a single powerful link you might need versus a billion lesser links, that boosts your page rank! The more high ranking and important a site (or it’s individual pages) the more power the link provides to your site (or page)!

 

Pages have their own Power.

Also to keep in mind that each PAGE of a site casts it’s own vote. Each page of a site is treated as it’s own individual “being”. Some pages have more relevance or “punch” in therms of how much power is passed down the backlink to any given site.  If a site links to yours from different, but important, pages you get a double-whammy effect. Each different page within the same site offering a link to your site gives a “vote” of it’s own.

Multiple links in a single page do not give multiple votes. One page one vote.

Pages are the Citizens of Your Site!

Additionally, a whole site doesn’t get a single page rank. Each page, again, is treated as it’s own entity. The index may have a low page rank, but a single article within the site may have a much higher page rank because of over all worth.

A note for the WebDesigners out there, this also takes into account the footer link one may or may not insert on a site one has designed and built. If the site ie relevant to your content and they garner a high Page Rank for anyone of their pages, that means your site gains that increased and very important vote. This also means that sites you design that don’t do as well won’t help your site’s page rank.

There are a number of ways to garner these all important links without becoming a link farmer, spammer, or just plain annoying.

Tips for better Link Building!

  • Published Articles on high-ranked websites.
    • A site that has a generally high readership, constant traffic, with a good number of related sites regularly linking to articles from there, will have higher page ranks on average, site wide. This gives your article on theirsite a better chance to garner it’s own higher rank.
    • Thus with a link to your site from this article, your site has a better then average chance of garnering more “link power”.
    • Where a particular link actually takes a reader to is also important. If it is to the main site, it will be your site’s index or home page that will garner that “link power”. Remember, single pages have single votes of their own.

Also, something people forget is that Page Rank does not equate to search rank. Yes they are different beasts but both count towards the overall “worth” of a website.