Inventory valuation: the number that decides your profit
How stock is valued changes reported profit and tax without anything physical changing. FIFO against weighted average, what cost includes, and the write-down nobody wants to make.
Economic nexus made sales tax a function of revenue rather than of offices. The work is not the filing — it is knowing, month by month, which states you have crossed.
Economic nexus is the rule that a business can be required to register for and collect sales tax in a state purely because of the volume of its sales there, with no office, no staff and no property in the state at all. It replaced the older position, under which a physical presence was needed, after the Supreme Court decision in Wayfair, and every state with a sales tax now applies some version of it.
For a seller shipping across the country, the consequence is administrative rather than conceptual. The tax was always owed by somebody; what changed is who has to collect it, and how many jurisdictions a mid-sized business now has to keep track of. The failure mode is not disagreement with the rule — it is crossing a threshold in a state nobody was watching and finding out eight months later.
Where you sell through a marketplace, marketplace facilitator laws generally put the collection obligation on the marketplace rather than on you. That removes a great deal of work, and it introduces a trap: some states count those marketplace sales towards your own threshold even though the marketplace collects the tax, which means you can be required to register on the strength of sales you never had to collect on. Check the treatment per state before concluding that a marketplace-heavy business has no obligations.
Do not register early "to be safe". Registration creates a filing obligation in that state for every period afterwards, including periods with no sales, and unwinding it takes effort. Register when the threshold is crossed, not when it is approached.
This is common, and panicking into a plain registration is usually the wrong move: registering makes you visible for the periods you did not collect. Most states run voluntary disclosure programmes offering a limited look-back and abatement of penalties in exchange for coming forward before being contacted, and the choice between that route and simple registration depends on how much uncollected tax is at stake and how long ago it started. That is a decision to take with an adviser, quickly, rather than a form to fill in.
A small seller does not need software to know where it stands; it needs one table, updated monthly: state, threshold, measurement basis, sales in the period, percentage of threshold, registered or not. Ettex Sheets holds that table with the running totals, so a state at eighty per cent is visible before it is at a hundred and ten; Ettex Records keeps the registrations, filing frequencies and confirmations per state; and the certificates that make some of those sales exempt are covered in exemption certificate.
To be direct: this is a spreadsheet, not a tax engine, and none of it is tax advice. Rates, sourcing rules and returns are what tax software exists for, and past a handful of states it is the right purchase. Thresholds and their measurement change by legislation; verify per state rather than relying on any list, including a recent one.
The rule that sales volume into a state alone can require a business to register for and collect that state’s sales tax, without any physical presence.
They are set per state and change. Many use a revenue figure over a measurement period; transaction-count thresholds have been dropped by a number of states. Verify per state.
The marketplace usually collects the tax, but some states still count those sales towards your own threshold. The treatment differs by state.
Take advice before registering. Voluntary disclosure programmes can limit the look-back and abate penalties, and plain registration can expose the earlier periods.
How stock is valued changes reported profit and tax without anything physical changing. FIFO against weighted average, what cost includes, and the write-down nobody wants to make.
Staff turnover is easy to calculate and easy to misread. How to work it out, why voluntary and involuntary must be separated, and what a replacement actually costs.
Business interruption cover replaces lost profit while you cannot trade. How the sum insured is calculated, why the indemnity period is the number that matters, and what is usually excluded.