How do eCommerce companies accept tax exemptions?
Does anyone have any insight into how an eCommerce business could automate the process of accepting and verifying tax exemptions? The parent corporation for our eCommerce website has nexus in 20 states where we are required to collect tax. We are doing that programmatically through the site but to provide tax exemptions raises some concerns. 1. Liability. I have been involved with our corporate controller regarding IRS audits of our brick and mortar retail stores and found that some exemptions we had approved were nullified by the IRS and we were liable for the tax. We had the exemptions on file but the IRS stated that the exemption didn’t apply to the products sold for example or were ineligible for a variety of other reasons. 2. Manual labor. We don’t have the staff to process exemptions manually. Nor do we think we could afford to hire anyone. Would we be calling various state agencies to confirm these? Would we be holding up orders from processing for days or weeks at a time while
