hi there, I got these notification lately, was wondering do I have to collect sales taxes where my business is located? my business is strictly online and is formed in wyoming. do I still need to get a tax permit from wyoming state and collect sales tax for orders coming from wyoming and remit those taxes to wy? or I need to meet the threshold first?
Topic summary
An online business owner formed in Wyoming received notifications about sales tax liability and is uncertain whether they must collect sales tax in their home state or wait until reaching a threshold.
Key Questions:
- Must they obtain a Wyoming tax permit and collect sales tax for in-state orders immediately?
- Do thresholds apply to their home state, or only to other states?
Guidance Provided:
- Businesses typically must register and collect sales tax in their home state, regardless of thresholds
- The collection rate may be based on business location or destination (varies by state)
- Nexus rules apply to other states—once sales volume or transaction thresholds are met in another state, registration and collection become required there
- Wyoming is considered relatively simple for sales tax compliance
Solutions Mentioned:
- Third-party services exist to automate collection and filing (though costs vary)
- Streamlined Sales Tax can simplify registration and filing for participating states
- Services like Bookkeep.com handle both tax filing and payment reconciliation
Recommendation: Contact Wyoming directly to confirm license and permit requirements, as most states require permits for businesses selling in-state, even if sales are primarily out-of-state.
I got these notifications btw.
“Feb 1 at 6:01 AM
You have a sales tax liability
Register and start collecting sales tax in the state your business is located in to avoid state penalties.”
“Jan 30 at 7:01 AM
You’re still at risk of not complying with US laws You’ve been liable for sales tax in Wyoming for over 30 days. To avoid penalties from the state, register and start collecting sales tax today.”
You should contact your state to determine for sure if you should be collecting sales tax but… typically you would register with your home state and collect for sales in that state. The amount to collect may be based on your location rate or based on the destination rate. That may vary from state to state. Then you should also be determining if you have nexus in other states. If you have reached nexus in another state ( determined by sales volume or number of transactions), then you register in that state and begin collecting sales tax and filing with each state. Wyoming is fairly simple but be prepared for extreme frustration in other states. I would suggest searching about determining Nexus for sales tax. There is a lot of info online that can help.
thank you. are there any apps or services to “streamline” this like an app collects and remits taxes for me? seem like quite the hassle if/when I hit thresholds
There are companies that specialize in sales tax filings. I am finding that some are much better than others. Some are quite expensive. but it might be worth it since filing can be very frustrating. Just be sure that whoever you choose is familiar with pulling data from Shopify. Also, be aware that you may need to pull several reports to have all of the data needed for filing. If I remember correctly, Wyoming is relatively simple though. There is an entity online called Stream Lined Sales Tax that can make registering much easier and in some states it makes filing much easier. I believe that it includes WY. Once you are set up with them they take care of the registering when you notify them that you have reached Nexus. They don’t do all state though. The company that we use is Bookkeep.com. They also enter sales and payment data for us. This helps for ensuring that you are receiving all payments due to you. We do a large number of transactions though and use the accounting system for summary entries only. I can give you contact info if you decide to talk to them.
cool thank you, I will reach out when I need it. last question for you, is it mandatory to get the tax permit for the state where my business is(wyoming) or I can wait until I reach the threshold?
Usually the state will require that you have a business license and sales tax permit if you have a business. If your sales are all out of state then you might not need that but I can’t advise on that. I’d suggest going to the state website and search on license requirements. If you are selling in state, you are almost certainly expected to have a sales license and permit. But again check with the state.
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