Cloud ERP Major challenges for State Sales Tax Collection by eCommerce Retailers

Major challenges for State Sales Tax Collection by eCommerce Retailers

In 2013 global eCommerce has become a business worth 1.2 trillion dollars. However, anomalies have arisen in sales tax collection due to the increasing shift of businesses to online. But there are genuine problems faced by eCommerce retailers in filing sales tax or state Sales Tax Collection by eCommerce Retailers.

Numerous tax jurisdictions

There are more than 11,000 jurisdictions for tax compilation and collection throughout North America, and new jurisdictions are coming up. eCommerce retailers have a country wide presence, and with so many tax jurisdictions spread across the country it becomes difficult and sometimes erroneous to file sales tax returns. A single point of calculation, compilation and filing is much more helpful.

Varying sales tax rates

The most challenging problem before eCommerce retailers is that sales tax rates vary from state to state and also locality wise within a state. This poses a major problem in calculating the price of a product. The same product has to be priced differently for different states and for different localities in a state. So two buyers from two different states will be paying two different prices for the same product. This will lead to price distortions and efface some of the competitive edge of online retailing.

Supplemental tax

There are some states that impose a local tax over and above the sales tax. This will complicate product pricing further. Moreover, this will mean that the eCommerce site has to be designed in such a way that it takes into account the physical location of the buyer. This has cost and time implications, and may even put off the buyer.

Does an affiliate constitute Nexus?

The law states that eCommerce retailers having some kind of physical presence or nexus in states will have to pay sales tax to concerned states. However, eCommerce retailers are still undecided about whether online affiliates which generate substantial sales for them constitute nexus or not.


You can solve your problems regarding sales tax with This is because Cloud ERP will solve the two most pressing problems regarding tax calculation, collection and remittance arising out of online sales through eCommerce retailers.

Tax information

Having the correct and real time information about tax rates in different states is one of the most pressing problems for eCommerce retailers. With the real time Integration with TaxCloud of tax rates Cloud ERP can solve this problem for ever.


No one expects the customer to calculate his or her sales tax. With Cloud ERP eCommerce retailers can integrate the shopping cart with real time tax calculation provided by TaxCloud. Thus accurate calculations of sales tax are made instantly and tax is added to product price when the user adds the product to his or her shopping cart. The user will know the amount of sales tax before taking delivery of the product.

Act now

Before your sales tax collections and calculations go awry, and you get involved in litigation with tax authorities you should act. Click to know more about Cloud ERP and how it can solve your problems about sales tax computation, collection and remittance.

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