Martina Chavez is an expert in sales tax compliance over at Avalara and I invited her on the show today to clear the air in regards to everything that is happening with Amazon and nexus when it comes to paying sales tax.
Ever since the decision of the supreme court case Wayfair vs South Dakota was handed down, states may now charge tax on purchases made from out of state sellers even if the seller doesn’t have a physical presence in the taxing state. This has enormous implications to ecommerce.
What You’ll Learn
- Martina’s sales tax background
- Do you have pay sales tax in all 50 states?
- What states does Amazon collect taxes on behalf of sellers and how does that work?
- How are my Amazon revenues taxed for sales from customers in states that require sales tax?
- The easiest way to file your sales taxes across all states
Other Resources And Books
Klaviyo.com – Klaviyo is the email marketing platform that I personally use for my ecommerce store. Created specifically for ecommerce, it is the best email marketing provider that I’ve used to date. Click here and try Klaviyo for FREE.
Privy.com – Privy is my tool of choice when it comes to gathering email subscribers for my ecommerce store. They offer easy to use email capture, exit intent, and website targeting tools that turn more visitors into email subscribers and buyers. With both free and paid versions, Privy fits into any budget. Click here and get 15% OFF towards your account.
Ahrefs.com – The best all in one SEO tool out there that I personally use to improve my search rankings for my blog and my online store. Click here to win a FREE 3 month membership.
GoBrandWin.com – The fastest and most effective way to grow your email list for free using group giveaways. Click here to signup for free.
SellersSummit.com – The ultimate ecommerce learning conference! Unlike other events that focus on inspirational stories and high level BS, the Sellers Summit is a curriculum based conference where you will leave with practical and actionable strategies specifically for an ecommerce business. Click here and get your ticket now before it sells out.
Steve: You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into the strategies they used to grow their businesses. Now, today I have Martina Chavez on the podcast, and Martina is an expert when it comes to sales tax compliance. And as you know, the entire e-commerce world has been in utter chaos ever since the Supreme Court decision of Wayfair versus South Dakota ruled that states may now charge sales tax on purchases made out of state. Anyway, today we’re going to talk about what’s going on in sales tax land and how to be compliant with your e-commerce business.
But before we begin, I want to give a quick shout out to Klaviyo who is a sponsor of the show. Klaviyo is the tool that I use to build real quality customer relationships with my e-commerce store. And because all my transactions and email correspondence is tracked in Klaviyo, I can easily build meaningful customer relationships by listening, understanding, and taking cues from my customers and deliver personalized marketing messages. So for example, with one click of a button, I can easily send a specific and targeted email to all customers with a lifetime value of over $100 who purchased red handkerchiefs in the past year.
Now, it is for this reason why over 10,000 brands have switched over to Klaviyo. And right now they have this cool docuseries called Beyond Black Friday where they discuss successful marketing strategies that their customers are using that you can emulate with your business. So, head on over to Klaviyo.com/beyondbf, once again that’s K-L-A-V-I-Y-O.com/beyondbf.
I also want to give a shout out to Privy who is also a sponsor of the show. Privy is the tool that I use to build my email list for both my blog and my online store. Now what does Privy do? Well, Privy is an email list growth platform and they manage all of my email capture forms. And in fact, I use Privy hand-in-hand with my email marketing provider. Now there a bunch of companies out there that will manage your email capture forms, but I like Privy because they specialize in e-commerce. Right now I’m using Privy to display a cool wheel of fortune pop up. Basically a user gives their email for a chance to win valuable prices in our store. And customers love the gamification aspect of this. And when I implemented this form email signups increased by 131%.
I’m also using their new cart saver pop up feature to recover abandoned carts as well. So bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com/Steve and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ for 15% off. Once again, that’s P-R-I-V-Y.com/Steve. Now onto the show.
Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here is your host, Steve Chou.
Steve: Welcome to the My Wife Quit Her Job Podcast. Today I’m really happy to have Martina Chavez on the show. Now, Martina is an expert in sales tax compliance over at Avalara. And I invited her on the show today to kind of clear the air in regards to everything that is happening with Amazon and Nexus when it comes to paying sales tax. And as you may or may not know, there was a huge uproar over the collection of sales tax ever since the decision of the Supreme Court case Wayfair versus South Dakota was handed down.
Well, states may now charge tax on purchases made from out of state sellers even if the seller does not have a physical presence in the taxing state. Now this is huge and extremely important to understand the implications for e-commerce and I’ve got a ton of questions for Martina today. And with that, welcome to show, how you doing today Martina?
Martina: I’m doing very well Steve, thank you so much for having me; it’s good to be here.
Steve: So, Martina, give the audience a brief bio in regards to who you are and your background in the area of sales tax compliance.
Martina: Sure, happy to do that. So hey everyone listening, thanks for joining. So like Steve said, I’m with Avalara. I have actually just celebrated my five years at Avalara, which is very exciting. Avalara is a global sales tax compliance software solution. We also offer a whole lot of other ancillary compliance options including professional services. So we’re not just software but primarily software. And when I started with Avalara, I knew nothing about sales tax. So, I definitely didn’t go into working at Avalara with some form of expertise.
I came from a company that I was doing accounting actually at, and we were using Avalara as a sales tax software to help us sort it all out on our end for billing, and definitely had many calls with customers who would say, hey, this isn’t my sales tax. And then I would get to click into the Avalara dashboard and be like, actually, according to this jurisdictional breakdown, here it is. And so, it was really cool to be able to have that direct experience with our product, and then later move into the world of talking about it on a daily basis and learning about it on a daily basis.
So, started with Avalara in business development, working with our technology partners, so helping partners integrate our solution into their platforms or build an API so that their customers could utilize our service because most people don’t want to get into the mess of learning or trying to offer a solution for sales tax. It’s really, really complex and it’s changing constantly as I think everyone listening probably knows to a certain degree.
Steve: We’re going to dig deep into the mess.
Martina: Yeah we definitely are. So yeah, so that’s kind of how it all began and then over the years, it’s something that I’m constantly being confronted with. And now I’m working very specifically with the marketplace channel. I’ve been working in and around the world of Amazon and supporting Amazon sellers for the last four years that I was at Avalara. So I’ve kind of been growing up with this new trend of sales tax compliance for the online seller or the Amazon seller, the marketplace seller or whatever category you want to put yourself in.
Steve: Let’s start by talking about Amazon actually. So how does Amazon collect taxes today? I’ve heard that they collect in certain states, but it’s your responsibility to pay the IRS. Other times they pay depending on the state and you’re still responsible for filing. How does it work right now?
Martina: So, right now when it comes to sales tax, which is different than income tax, I just want to make sure there’s that distinction. When it comes to sales tax, Amazon does have a calculation engine that they use to support the seller on their platform which is great. It’s a free tool for the seller to use but the seller is still obligated to determine where that sales tax needs to be collected. So, if you’re living in California for example, then it’s a pretty much a no brainer that because you live here that it is your home state and therefore you’re obligated to collect sales tax here. And because you’re selling on Amazon and maybe you’re using FBA, your inventory could be in a lot of places. And before last June 21st, which we’ll get into what that date means and kind of everything that’s happened since June 21st of 2018, but the rules in each state are different around why and when you need to collect sales tax.
So, Nexus is this fancy term for physical presence that is used throughout every state throughout the US to identify who is obligated to collect sales tax. And again, each state has a little bit different variation on who they think is liable. So, a state that doesn’t collect sales tax like Oregon, you wouldn’t be obligated to collect sales tax there ever because there’s no sales tax. So, that’s an easy one, right? But if you’re living in California and say you sell into Washington, that’s an interesting one because Washington is one of the marketplace fairness [ph] states.
So, the state of Washington has ruled that Amazon and other marketplaces have to remit the sales tax that’s collected on behalf of the seller, but the seller is still obligated to register and file that that sales tax was collected. So, the seller is actually not completely off the hook. And I think that there’s a little bit of confusion there. I get that question a lot. We get that question through the sales team a lot, customers who are coming to us seeking our support. So Washington is an example of that. And then there’s going to be other states like South Dakota, which, this might be a good segue to kind of start talking about the economic Nexus side of things, but there’s other states that have different rules about when you’re supposed to collect sales tax and the seller is obligated to do that.
Once you as a seller have said, yep, I’m getting registered and you get your ID, your identification number to tell the state that you are collecting sales tax. Then you can set it all up in Amazon in your seller central profile, and then Amazon will in fact just start that calculation process for you so you don’t have to do anything.
Steve: So, just to kind of sum up what you just said, right now, Washington is one of those states where Amazon will collect taxes on your behalf when you sell into Seattle or Washington. However, you still have to do some work. You still have to register in that state, even though Amazon is still paying sales tax on your behalf.
Martina: Correct, that’s exactly right.
Steve: Okay. And there’s only a handful of states that are currently like that, right? Do you happen to know which ones off the top of your head or?
Martina: I have a handy dandy map in front of me that our company actually keeps up to date all the time. And so the crazy thing is, there’s so many different changes all the time that I’m constantly having to reference that. It’s hard to keep it all in on the top of the head, but yes, I do.
Steve: I’ll just post that maybe underneath the podcast in the show notes.
Martina: Yeah, that would be great. So I’ll send you that link for the map because this has just a ton of information on it, and you’ll be able to identify exactly which states are technically what collecting or I shouldn’t say collecting, remitting on behalf of the seller and then which states have economic Nexus and which states have affiliate or click through Nexus. And so, there’s some other forms of Nexus that sellers should be aware of.
Steve: Now, in terms of the states that are not remitting on your behalf, what do you have to do?
Martina: So, states that are not remitting on your behalf, which is most of them and majority of states are not remitting on behalf of the seller. You have to do that yourself. So in addition to filing, you also have to send in the money. So that’s really the only difference which I think is — I actually think for most people, the filing portion of it is the more challenging part because that’s the part where you have to aggregate your data and you have to know exactly how much sales tax you collected in what state and what jurisdiction it’s supposed to go to. And then you’re supposed to say, hey, state of wherever, State of California, here is my document saying that I collected all of the sales tax and it is due in XYZ location. And also here is the money.
So, really the only thing that the state of Washington now is requiring Amazon and marketplaces to do is to send them the money. Yeah. All the other complexities of it still rely or still live with the seller.
Steve: So a common question that I’ve been getting asked is, let’s say I live in California, but I don’t have a physical presence in New York, for example, why should I have to pay sales tax in New York? And I think this is like a good segue to that court case. So, if you wouldn’t mind kind of summarizing what happened in June 21st of last year, that’d be great.
Martina: Sure absolutely. So last year was a very, very exciting year in the world of sales tax. And so, what was going on prior to June 21st was there was a case of South Dakota versus Wayfair Inc. And it was presented to the Supreme Court, and basically the case involved South Dakota saying, hey Wayfair, you because you sell into our state, you owe us sales tax, we want to enact an economic Nexus rule. And it was specifically in relationship to Wayfair at the time. And so, they were saying even though you don’t have a physical presence, you don’t have warehouses, you don’t have employees living here, your headquarters isn’t here, you haven’t gone to trade shows, those are all examples of what could potentially trigger a physical presence in a state.
The Supreme Court ruled in favor of South Dakota. So, they said, yeah, South Dakota you’re right, you actually we agree with you, we think that Wayfair Inc. should be paying sales tax or should be collecting sales tax I should say for any of the sales that they’re making into your state. And so, thereby there was economic Nexus was then ruled to be a law. So, all of a sudden South Dakota is this first state doing that and all of a sudden all these other states started to enact the same law. They’re saying, oh okay, South Dakota just got that ruling; we’re going to do the same thing. And so, it’s been kind of this slow but not that slow process of lot of new states then coming to enact the exact same law.
So, economic Nexus and in the State of South Dakota to start, what they’re saying is there’s threshold. So it’s not every single person who makes a sale ever like if you’re selling something and you sell something one time and it was a $20 sale, you’re not all of a sudden obligated to start collecting sales tax in South Dakota. So they did create threshold triggers. So in South Dakota, and I can go over the triggers that come up for other states as well. But in South Dakota specifically, it was $200,000 or — excuse me, no $100,000 or 200 or more separate transactions or both.
So, if you sell more than $100,000, or if you make more than 200 transactions, so those transactions could be $10 each but there you are, you’ve then triggered this economic Nexus obligation which means that as a seller whether you’re selling on Amazon or you’re selling through your online store BigCommerce, Shopify, whatever platform you’re selling through, you are now obligated to register and start collecting sales tax going forward. So, one thing to also just be aware of, is when you register for sales tax collection in a state, you’re basically saying, okay, so I hit that threshold this year. So I’m registering to collect sales tax for basically ever for the life of my business. So even if the following year you don’t hit the threshold, you’re still registered, you’re still telling the state that I am going to collect sales tax, so that that process has already happened.
Steve: Because you have to pay sales tax in all the different states now, it seems like for a small business owner that burden is tremendous.
Martina: Yeah, yeah so great question. So yes and no, I think it depends on the case, right? So, if a seller has been selling for let’s say a year or more, and they’re only collecting currently in their home state, and maybe they’re selling it through FBA, so they have a lot of inventory and a lot of places and they already have a physical presence obligation and let’s say they’re a top seller. If they are top seller, and they know that that revenue marker is a kind of an easy threshold for them to have already hit or hit very soon, then yes, they’re going to have to start thinking about what economic Nexus means for them in a very real way.
The good news is because economic Nexus is something that just passed; it’s not something that they would have to be worried about for five years of back taxes for example. It’s something that in the case of South Dakota, that legislation though it passed, it wasn’t enacted, it wasn’t June 21st, 2018. The process takes some time to actually make it a viable ruling. So, there are other states though, that have followed suit. And California and New York are the most recent ones and those are huge states that most people are selling into. And so, I think that those two states in particular are the ones that I think are the kind of the biggest triggers for people.
Steve: Can we talk about California real quick? Mainly because I know a number of the students in my class, they got notices from California to start filing and they came to me asking questions, and I was just kind of curious what your take is. When you get one of these notices, what do you do?
Martina: Rule of thumb; don’t ignore it, so ignoring it is not going to help. California is a really aggressive state, they will keep coming after you and they’re pretty real repercussions on not being in compliance and it goes far beyond. It can go far beyond just your business, this can affect your family from credit and liens and that sort of thing. So, it’s not something to ignore. You want to talk to somebody, talk to a ideally a state and local tax expert, an accountant who really does have the expertise in state and local taxes, who can say, okay, so here’s you got this notice.
What does this mean for you? Do you start collecting sales tax? Do you register and start collecting sales tax as of today, or do you have back taxes that you should have been collecting for over the years? And if so, do we do a voluntary disclosure agreement with the state? So there are things, there are ways to move forward successfully as a business, but definitely the one thing not to do is don’t ignore it.
Steve: Since I live in California, I know that there’s like 25 different sales taxes, depending on the region. Are they really expecting a small business owner to take care of that stuff?
Martina: So here’s another piece of good news for you. You don’t actually have to keep track of the different kinds of or the different sales tax jurisdictions, because Amazon as a platform and other software solutions like Avalara will take care of the calculations for you. So, that includes knowing when there’s a jurisdiction change and knowing the tax rate in X, Y, Z location. And you’re right. There are a lot of different jurisdictions, there’s over 600 in the United States. I mean, there’s tons, we have another map that we can share with your audience to kind of give you an idea of all of the different tax rates that exist. And then, and it’s just an example. It’s just a visual example of, yeah, this thing is, it’s a beast, it’s complex, and it’s different everywhere, and the rules are constantly changing.
So, the point is that you shouldn’t have to do it manually, there’s software out there to help you with that. So, from a calculation standpoint, I wouldn’t be worried or concerned about that side of things, because Amazon already takes care of it. If you’re using another platform, like a BigCommerce or Shopify, good news, again, Avalara is actually embedded into both BigCommerce and Shopify platforms. That’s at least the calculation engine is free in both of those platforms, powered by Avalara. And then we have integrations to over 500 e-commerce and accounting platforms, so there’s really kind of no place that we wouldn’t be able to support or some other form of support wouldn’t be available.
Steve: So, I think your answer might be a little biased but let’s say I just started selling online and hopefully you won’t be biased, but do I really need to register in all 50 states?
Martina: That is a phenomenal question and the answer is no, and I’ll say this with confidence because first of all we know that there isn’t sales tax in all 50 states. So, you at least 46 states are not sales tax worthy, you wouldn’t have to collect in the in those.
Steve: 46 states.
Martina: So 46 states but the answer is no. So, if you’ve just started selling, most often you’re selling into — and let’s use Amazon FBA as an example just because it’s an easy way to kind of think about this, most often your inventory is living in maybe two to three states to begin with. And it really depends on what the demand ends up looking like and what your total inventory ends up looking like. And so, usually start with a few states because that’s where your inventory is actually living, so you start with your home state, get registered there definitely, that’s no brainer and get registered in your home state assuming you have sales tax in that state.
And then you would have to track where your inventory is landing, so you have to also abide by the physical presence rules, so those don’t go away just because economic Nexus is now a layer on top of that. And then the next thing to track is how much revenue you’re driving from individual states that have enacted this economic Nexus rule. And like I said, we have a resource for you so we have a map and then below the map is this really great breakdown of all the different states, when they have had economic Nexus enacted and what the thresholds are.
And so, you’ll be able to determine, okay, so I’m selling in California, and I know my inventory lives in Texas and in Florida let’s just say, so start by registering in California, get registered in Texas, get registered in Florida, start collecting there, watch where your sales are going. And if you see your sales going into a state that has economic Nexus, for example, South Dakota, keep an eye on where that threshold limit is at. So maybe you only sell $25,000 into South Dakota and you hit 100 units let’s say, no sweat, you do not register. You did not hit the economic Nexus.
Steve: It just sounds like such a huge burden. So, thresholds every state has different thresholds, right? Like how am I going to do frack all the thresholds of all my sales? It seems like I would need like a dedicated person to do that.
Martina: Yeah, so again, this is where software comes into play. And of course, I’m biased. I believe wholeheartedly in the software that Avalara has to be able to track all this, but there are other software options out there. And so, at the end of the day what it comes down to is there is an obligation for the seller to take their business really seriously when it comes to sales tax compliance, and unfortunately states in the US has not made that an easy burden. And it’s interesting, what I think is so interesting about the marketplace channel and one of the reasons that I love working with Amazon sellers and other folks selling online is because this is like the new frontier.
This is global commerce is changing and it’s changing super-fast and anyone selling online is a part of that change. And states have traditionally relied on sales tax coming from brick and mortar stores to support them, so whether that’s keeping the roads safe or putting in those traffic lights or whatever other services, and we all experience every day that we all benefit from like our police officers and our firefighters like sales tax is a part of that revenue. And so, states of losing revenue because people are buying online and not buying in the stores in the same volume that they used to. So, that’s why states have started coming up with all of these new ways to collect the sales tax. And it’s smart on their end, but it’s hard on the hard on the business owner. And so it is something that’s very real. But again, software is available to help all of these processes.
Steve: So, do you have any insights on where the legislation is going or what’s going on right now? I would imagine there’s lawsuits going left and right, or discussions going on and how states can possibly enforce all of this stuff.
Martina: So, good question. I actually don’t have a ton of insight into any of that. What I have insight into is just as it comes, the new legislations that are passed and new states that opt into economic Nexus. And that’s something that we keep up to date through the website at Avalara.com. But aside from that, I’m not in the rooms with the lawmakers so I don’t know. I do, I definitely know, I’m very aware that there are a lot of Amazon sellers and probably others but I feel like Amazon sellers maybe are just the most vocal in kind of expressing their upset about these new legislations and the impact that it could have on them and their business.
And so, I know that there’s some folks who are getting together to kind of try to fight it and there’s definitely two sides of the camp I think. There’s some folks that I talked to who are like, yeah, I just got into compliance and I’m using software to support me and it’s fine. I would rather be in compliance then be a risk of my family potentially being harmed by me not kind of following the rules and then having a state like California come after me and my home and that sort of thing. So that’s literally, a conversation I’ve had with a number of sellers before.
And then there’s other conversations I’ve had where sellers are like, yeah, like, I’m not doing anything, they have to come after me, they have to come after me for me to believe this. And that’s, it’s a choice and it’s a business choice. And I think this is one of the things that we do talk about this when we talk to sellers is you’re measuring your risk in involved, right. So it may be that the risk of not being in compliance doesn’t outweigh the flip side of being in compliance. So being in compliance, what does that mean as far as time and resources and maybe some financial burden as well, at least in the initial stages. It does cost more money to get registered and in states and it definitely takes time.
But going forward, once you’re registered, it’s just a pass through the, you’re not actually — sales tax is not your money. It is the customers’ money; it’s the consumers’ money. So, it’s passing through you, you end up being becoming kind of the tax man and in a weird sort of way. But then on, the other side of it is for some people, they are of the opinion of, yeah, I’m not going to get registered, I don’t really sell that much. It’s just not huge enough. So, if they do come after me, and I owe a penalty, it’s not going to be a penalty that’s really that harmful to me or my business. And so, that’s something that can be weighed. And it’s always a business decision.
Steve: So, if you can take off your Avalara hat for a minute, let’s say there’s a company that’s been selling for five years, they only collect sales tax in their home state because that’s where they have Nexus, what would you advise that they do, and how do you come up with these decisions on whether to wait till they come after you or be proactive about it?
Martina: It’s hard to take off the Avalara hat because this is what I’ve been doing for the last five years. And I do have to say, I’m not a tax advisor. So I have opinions but I’m not — I definitely wouldn’t want to be held accountable for someone making a decision based on my…
Steve: Of course, absolutely that’s a given. That’s a given.
Martina: Disclaimer, disclaimer yeah. So you’re saying you are, let’s pretend it’s you. So Steve, you’ve been selling for five years, you’ve been collecting in your home state?
Steve: California yep.
Martina: In California. Good that’s great. I’m glad you’re collecting in California.
Steve: I know right. The most aggressive state yeah.
Martina: Of any of the states, California, Texas, and Florida are pretty aggressive yeah. Colorado actually is or Denver is. Yeah anyways, we could get into all the different states, but so you’re collecting in California and you’re selling on Amazon. Is that — was that the?
Steve: Yeah. Let’s say you’re selling on Amazon.
Martina: Okay. So, I mean, there’s information you should have. This is kind of the stance that I have. I think it’s about you being armed with information so that you can make those decisions. But my opinion would be, look, if you really care about your business and you want to keep doing this business, it would behoove you to seek some professional advisement around your sales tax obligations. So, there’s accountants that you can talk to who can give you the kind of the right information but there’s options for you. You can either get voluntary disclosure agreement if your sales tax obligation is so big across many, many states.
If it ends up at the end of the day determined that you have a physical presence that you should have been collecting sales tax in, let’s say, five states plus economic Nexus thresholds have been hit in another four or five states, and you have suddenly have 10 more states that you’re needing to collect and remit sales tax and potentially should have been for four or five years, that’s a bigger case. I think most people aren’t going to be in that situation.
A lot of times, when we’re talking to folks especially, and I’m going back into Avalara hat land, but when we talk to people and we have accountants in the conversation, a lot of times the experts that we’re engaged with are of the mindset that it’s okay to start collecting from now on and you’ll just move forward because at the end of the day, the states are really just looking for people to start giving the money. They’re like, can you just start collecting sales tax, but sometimes it’s bigger than that and there’s nuances there. And that would just be something that you’d have to work with an expert on.
Steve: Okay. Have you heard of any cases where a company has just gotten totally busted and ruined as a result of this?
Martina: Yeah, unfortunately, yeah. I mean, it was like three years ago maybe, there was an entity that came to us, and a lot of times, people who come to us just kind of going off on a tangent here for a second, but a lot of times when people come to us, it unfortunately is not a proactive thing. People are becoming more proactive now, but a lot of times it’s because they’ve just gotten audited or other, and so they’re kind of like man okay, we need help. So, we’d like to promote that preventative method. But yeah, we’ve had a few sellers come to us in the past saying, hey, this is my situation. I’ve got states coming after me, they’re getting the letters.
Once you get the letters, the states know, if you’re getting a letter, the state knows that you have an obligation to collect sales tax and they are going to come after you. That is what they’re telling, they’re saying, we know, we have people on staff who we’ve hired to do this job to basically come after you and others. And we had a seller who it would have been over a million dollars for him to actually get in compliance because there was so many back taxes and that was with a voluntary disclosure agreement.
So, what’s crazy is that that’s like a long time that’s many, many years of selling and not collecting in a lot of states at high volume, at high revenue and never collecting the sales tax and not remitting anything. And so there were penalties and interest, and even though with a voluntary disclosure agreement, those penalties and interest get minimized to a certain degree, you have to pay a big lump sum all at once just to kind of be like, okay, here is all the money, it’s not 100%, all of it, you’ve given me a little break on the penalties and interest but here’s a lot of it all at once. And this person was would have owed all at once over a million dollars. And that puts them out of business. It’s just like it was too much.
So yes, so there’s unfortunate circumstances. The good news is that’s rare. It’s actually like not — it’s not the everyday scenario. Most people don’t have that kind of massive volume in their sales as online sellers, and so if they’re doing a voluntary disclosure agreement, it’s a much more manageable amount to pay. And then if that’s not necessary, then really all that they’re looking at is the immediate expense that comes along with getting registered and starting to collect and pay going forward.
Steve: Right. Okay. Yeah, fair enough. Well Martina, thanks a lot for coming on the show and lending your expertise. If anyone wants to find you with more questions, where can they get you?
Martina: They can find me at Avalara.com. You can get a lot of information online but you can email me if you have questions, Martina.Chavez@avalara.com. If you’re going to be at a show coming up, we’re going to be at Prosper, we’ll be at Sellers Summit, so we’ll hopefully see some folks there as well. I’m looking forward to that Steve and yeah, we float around a lot of different places so find us in many places, but you can reach out to me directly at Martina.Chavez@avalara.com.
Steve: Awesome. Well Martina, I really appreciate your time.
Martina: Yeah. Thanks so much Steve, I appreciate it.
Steve: All right. Take care.
Martina: Okay, you too. Bye-bye.
Steve: Hope you enjoyed that episode. Now, I probably get asked about sales tax at least three times a week. So, hopefully this episode with Martina has answered all those questions. For more information about this episode, go to Mywifequitherjob.com/episode246.
And once again, I want to thank Privy for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers. They offer email capture, exit intent, and site targeting tools to make it super simple as well. And I like Privy because it’s so powerful and you can basically trigger custom pop-ups for any primer that is closely tied to your ecommerce store. If you want to give it a try, it is free. So, head on over to Privy.com/Steve, once again, that’s P-R-I-V-Y.com/Steve.
I also want to thank Klaviyo which is my email marketing platform of choice for ecommerce merchants where you can easily put together automated flows like an abandoned cart sequence, a post-purchase flow, a win-back campaign, basically all these sequences that will make you money on autopilot. So, head on over to Mywifequitherjob.com/K-L-A-V-I-Y-O, once again that’s Mywifequitherjob.com/K-L-A-V-I-Y-O.
Now, I talk about how I use both of these tools on my blog, and if you’re interested in starting your own e-commerce store, head on over to mywifequitherjob.com and sign up for my free six-day mini course. Just type in your email and I’ll send you the course right away. Thanks for listening.
Outro: Thanks for listening to the My Wife Quit Her Job Podcast where we’re giving the courage people need to start their own online business. For more information, visit Steve’s blog at www.Mywifequitherjob.com.