Last year we released a short video highlighting a situation we refer to as “the biggest tragedy in sales tax.” Essentially a business which has a tax obligation, or “nexus”, to a state fails to collect sales tax from customers at the time of purchase and is audited. The state assesses the business for the tax, plus heavy penalty and interest charges. What once would have been willingly collected from paying customers now comes directly out of the company’s pocket. And sadly, the penalty and interest charges from these audits can balloon even relatively small assessments into business crippling amounts. Such was the case in the state of Washington just recently.
