As a semiconductor manufacturing company, what do you need to know about nexus and multi-state tax laws? Despite the fact that much of the manufacturing is often done in other countries (often by third party contract manufacturers), many of these businesses engineer and test the devices domestically, which often makes them subject to a wide range of laws from various states across the country.
Last week, we discussed various multi-state tax issues software companies often overlook. This week we look at another industry that often misses sales and use tax ramifications on their sales: Software-as-a-Service (SaaS). Many think that because it’s not a tangible product or even clearly defined as a service (at least according to traditional definitions), these companies don’t need to worry about state sales tax. Keep reading to find out why this could be a costly mistake.
What do software companies need to know about when it comes to multi-state tax issues? Last year we shared an overview of nuances many in the field don’t think about, but need to consider when it comes to their organization. As a large portion of the technology industry, it is important that software companies are aware of how matters such as nexus, as well as individual state sales tax and income tax laws, may affect them.
In our practice, we see many new clients who have sales tax exposure issues. And we, of course, are happy to help them identify and then mitigate that exposure. As we discussed in our blog last month, “Sales Tax Non-Compliance: What’s Your Exposure“, sales tax exposure can add up quickly. Sales tax is a gross tax and if not properly collected from the buyers at the time of the sale, it can come back to haunt the seller later.
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