Understanding and Using Economic Nexus in ARTERNAL
What are Economic Nexus laws?
Economic Nexus laws require sellers to pay sales tax for sales made in a state once a certain dollar amount or number of transactions is exceeded, regardless of the seller's physical location. These laws apply to businesses and sales in the United States only. International galleries may not be affected.
For more details — View this article.
How is Economic Nexus Integrated in ARTERNAL?
When you create a transaction in ARTERNAL, the system can automatically calculate taxes based on the state listed in the transaction address. ARTERNAL detects when a transaction meets Economic Nexus thresholds and applies the correct tax.
Steps to Use Economic Nexus in ARTERNAL:
Step 1: Create a New Invoice
Go to Invoices and click the New Invoice button.
Step 2: Select the Contact
In the invoice, click Search for Contact and select the contact. The contact's address will automatically populate
Step 3: Add Works to the Invoice
Click Browse Inventory to add the desired works to the invoice.
Step 4: Calculate the Tax
Expand the Tax drop-down menu and select Auto Calculate. ARTERNAL will automatically calculate the tax based on the transaction details and applicable Economic Nexus laws.
Step 5: Send the Invoice
Click Send tab, to send the invoice.
Step 6: Payment and Economic Nexus Tracking
After sending the invoice, you can click on the Payments Tab to record a payment made.
Once the invoice is paid, if it has hit Economic Nexus for the state, it will show up in the Economic Nexus card for that state.
Step 7: Viewing Economic Nexus Cards
To view Economic Nexus cards, go to the left-hand menu and select Economic Nexus.
In-Person Sales: Recalculating Taxes for Out-of-State Events
If a sale is made at an out-of-state location (e.g., an art fair or event), check the In Person Sale box. This will recalculate the taxes based on the point of sale location.
Example:
If your gallery is based in New York but you made a sale in Los Angeles at an art fair, checking this box will recalculate the taxes based on Los Angeles as the point of sale.
Frequently Asked Questions (FAQ):
Q: What is Economic Nexus?
A: Economic Nexus laws require sellers to pay sales tax based on the sales or number of transactions in a state, regardless of the seller's physical location.
Q: How does ARTERNAL calculate taxes based on Economic Nexus?
A: ARTERNAL automatically calculates taxes based on the address in the transaction and detects when the transaction meets Economic Nexus thresholds.
Q: How do I account for out-of-state sales at events or fairs?
A: Check the In Person Sale box when a sale occurs at an out-of-state event to recalculate the taxes based on the point of sale location.
Q: Where can I view transactions that meet Economic Nexus thresholds?
A: You can view such transactions in the Economic Nexus section in the left-hand menu.