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The Naked Truth About Clothing and Sales Tax

Posted on April 30, 2014 by Alexander Diegel

The Naked Truth About Clothing and Sales Tax

AvalaraThank you to our partners at Avalara, who hosted a webinar for us on the challenges, and solutions to, the treacherous landscape of managing state-to-state clothing tax laws. From common misconceptions to the specific quirks in certain states (different taxes for different-sized boots?) Avalara covered everything an e-commerce clothing retailer would need to know. Here are some of the highlights:

Webinar host Jennifer Myers stresses the importance of understanding nexus for those in the clothing industry. “Nexus” is the connection between a state and a business, and allows a state to compel an out-of-state company to register and collect sales tax. The out-of-state company must have a “physical presence,” but that definition is changing, something the webinar goes into more detal about.

The webinar will help clarify:

• Whether you have established nexus in the last year
• The confusion regarding Florida, Texas, and New York’s state tax laws on clothing
• Product taxability
• Product Exemptions

Jennifer also details the risks of determining sales tax rates by zip codes, and the inaccuracy of the practice.

For more on managing the treachery of state-to-state tax laws on clothing, you can review the slides here, or view the full webinar.