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The Naked Truth about Sales Tax Compliance in the Apparel Industry

Avalara: From Corsets to Choir Robes

There are many factors that come into play when managing sales tax in the apparel industry. Exemptions, thresholds, jurisdictions, and sales tax holidays are just a few. ArcherPoint recognizes that retail, and in particular clothing and apparel companies, face unique challenges when it comes to compliance. We’ve teamed up with the sales tax experts at Avalara to bring you these four key truths about clothing and sales tax.

Avalara White Paper: From Corsets to Choir Robes Truth #1: You shouldn’t try to be a tax expert in every state. Every state has its own set of rules around what triggers nexus (sales tax obligations due to your connections with a state), and the rules are constantly changing. Just because you don’t have nexus today doesn’t mean you won’t tomorrow.

Truth #2: Rates and exemptions on clothing vary from state to state. Some states differentiate between types of clothing (general use, formal wear, work attire), and some jurisdictions have exemption thresholds.

Truth #3: Sales tax holidays are not consistent from one year to the next or from state to state. They are usually not announced until close to the actual day, and what is included varies.

Truth #4: Real-time product taxability data is essential. Rates databases are only as up-to-date as the last time you updated them, don’t consider taxability rules such as thresholds, and don’t factor in sales tax holidays.

The good news is that you can suit up with cloud-based sales tax automation suit of armor that integrates with your Microsoft Dynamics NAV and/or ecommerce systems, protecting you from costly negative audits.

To learn more about how to keep sales tax from unraveling the fabric of your bottom line, check out this eBook: From Corsets to Choir Robes: Sales Tax Compliance in the Apparel Industry.

To learn more about sales tax automation solutions for NAV, contact ArcherPoint.