Do you conduct any activities in other states where you're not currently registered that could obligate you to collect sales tax in those states? The rules have changed dramatically with the new Supreme Court case.

There are more than 8,000 different taxing jurisdictions in the US alone. That means there are thousands of different tax rates that might apply to a given transaction. Getting the rate wrong can lead to an unexpectedly large and potentially devastating sales tax audit assessment.

Knowing what rate to charge is difficult enough, but whether or not what you're selling is even taxable in the states where you have customers, can pose another level of complexity. Whether the product(s) or service(s) you sell are taxable across multiple states all depends on the rules in those states. Most states tax all sales or leases of tangible personal property (TPP) by default. The only way an item of TPP is not taxed is because it's specifically exempted by a state. On the other hand, in most states, only certain services are subject to tax. And those rules vary by state, and they're constantly changing. Hence the complexity.

This may be the easiest area for state auditors to find big exposure. Many companies don't realize that once they are registered to collect tax in a state, they are required to collect sales/use tax on each taxable sale OR they must have a certificate from the customer to document why no tax was collected. In most cases, it's a resale certificate you need if you are making wholesale sales. The next most common type of certificate is an exempt organization certificate. The question is: do you need one for each customer in each state? The answer is "yes" (generally speaking).

When the state auditor shows up, he/she will always look at your purchases to determine if use tax has been paid. Sometimes businesses are caught off guard by this since states almost never audit individuals.