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Nasir and Matt welcome Mark Faggiano of TaxJar to discuss how business owners cancomply with the various sales tax rules. They also answer, "I'm looking to incorporate in the next few months. How much should the tax consequences play a factor in my decision making?" Full Podcast Transcript NASIR: All right. Welcome to our podcast. This is Nasir Pasha where we cover business in the news and answer some of your business legal questions, and we also have Matt here too, for once. MATT: Yeah. You can just take over the entire show if you want. NASIR: Yeah. MATT: You’d have thought, after a hundred episodes, we would have gotten a good intro by now but I guess that’s not the case. We have a great episode today. We haven’t had a guest on in a while – at least it seems like it's been a while. But we have Mark Faggiano with TaxJar, the founder and CEO of TaxJar. Did I get your name right, Mark? MARK: You did. Nice work. Good to be here guys. MATT: Oh, yeah, thanks for being here. NASIR: Yeah, thank you so much. Yeah, so taxjar.com is a company in San Diego but what's interesting about what they do – and obviously Mark can speak more of it – is on sales tax and dealing with it, especially from a small business perspective doing online e-commerce. I know a popular business that seems to be kind of sprouting up probably the last few years – and, Mark, you can probably correct me if I’m wrong – is these kind of online sellers that are using Amazon to fulfill its shipment and basically uses a shopping cart instead of setting up their own website. It’s an easy process if you have your own product that you can buy at wholesale or something to that effect, then it might be a good way. But what about the sales tax implications in that? I think sales tax in general is just a mess of laws. I mean, because you have to deal with how each state applies the different taxes, depending upon where it's being sold and who it’s being sold to. So, Mark, this is something you deal with every day, right? MARK: Yeah. So, to call it a mess is really an understatement. There's probably some more words that you don’t want to use to better describe it but you're exactly right. So, you know, five years ago, if we were having this conversation, if you talked to an online seller, they would probably say, "I'm an eBay seller” or “I just sell on eBay" and what's really happened and where we’re at now is that folks are multichannel, right? They’re selling on eBay. They're also selling on Amazon most likely. They also have their own website and they're using a point-of-sale device. They’re using Square to go to a craft fair on a weekend or, you know, some kind of trade show. And what that’s done is dramatically change their sales tax complexity. And, using Amazon as an example, by the way, there's no barrier to entry, right? To do all those things. NASIR: Exactly. MARK: It's not very hard to get a presence set up across the board on all those things. So, what's happening now is that there are so many sellers and they're competing, you know, head-to-head. One of the biggest differentiators for them is shipping. So, if you and I are selling a pair of Air Jordans, right? Just as an example, and you're offering next day – Amazon will provide this eventually – same-day turnaround and I’m providing kind of the traditional three to four day, I don’t stand a chance, right? So, that's why folks are using this Fulfillment by Amazon service because it allows them to compete much better and also the customers demand just quicker turnaround. What happens is when they use Fulfillment by Amazon, they are literally sending all of their inventory to Amazon and then Amazon takes care of the rest. But what Amazon is doing is just distributing that inventory based on their kind of internal algorithm to say, "Okay, Matt’s selling Air Jordans. We know that those sell in a particular part of the country so we’re going to send everything to our warehouse in Fresno,