If you’re selling tickets on your website, then you might be required to collect sales tax on your transactions — even if your state doesn’t require it.
This is called economic nexus and it’s a good idea to familiarize yourself with it to make sure you are in compliance with states that enforce it.
Economic what?
Yeah, economic nexus isn’t exactly the most intuitive-sounding thing. But, thankfully, the concept of it is much simpler than its name implies.
“Nexus” is another way of saying something that connects groups together. In this case, that something is business dealings or economic transactions.
The idea is that some states want to collect sales taxes on transactions that happen in their state, even if the platform (or, say a website) is not technically in that state.
Why you should care about economic nexus
Some states may want to collect taxes on all sales. Others collect taxes on sales over a certain threshold.
The reason we’re sharing this information with you is that you may be directly affected. If you are using our Event Tickets plugin and/or our Event Tickets Plus and Community Tickets add-ons, and some of your sales take place in a state that enforces economic nexus rules, then you’ll want to read on.
These are products that facilitate ticket sales on your WordPress site, which could impact you. We want to make sure you have everything you need to cover your bases just in case.
How to tell if you’re affected by economic nexus rules
The best thing you can do is find out what states you currently do business in, see if any of them enforce economic nexus rules, then consult with a tax professional. But we have a few other tips and resources to get you started.
- Read a bit more on the topic. We have an article that looks at marketplace facilitators and laws that might affect those who let others use their platform to sell goods and services, like tickets. TaxJar has a few helpful articles as well, including one that defines economic nexus, one that provides information on the laws for each state, and another that covers use tax notice and report laws.
- Find out what laws are in effect in the states you are selling in (even virtually). Again, TaxJar’s article that covers each state is a great place to start.
- Keep an eye on your per-state sales reports.
- Stay up to date on the frequent changes on state rules and thresholds.
- Use TaxJar’s sales and transaction checker.
- Integrate TaxJar’s WordPress plugin with WooCommerce to automate things and gain some peace of mind.
- If you happen to be selling tickets via Eventbrite, it’s good practice to make sure your tax collection is correctly configured on those events.
- Consult with a sales tax expert
And, while you’re at it, it would be a good idea to check out our article on marketplace facilitators if you are using our Community Tickets add-on. There are additional things to take into consideration when your site is being used as a marketplace where other people sell things and this article will give you a few tips.