Managing Taxes Online for Your Farm
Businesses and consumers alike purchase everything online today - and products from your Farm are no different. The adoption of online commerce tools for Farms is accelerating as Buyers appreciate the ease and convenience of ordering from any device at any time.
Selling your Farm products online, however, always raises questions about taxes - especially when and where they apply. Taxes are complex, constantly changing and highly regulated. We know you’re not only running a Farm, you’re running a business. When it comes to something as important and variable as tax rates, it’s best to invest the time and money needed to get them right the first time for efficiency and peace of mind.
The costs of ‘doing it right’ include your time, your accountant’s time, and the costs of software subscriptions. Costs of doing it wrong? Time and money down the drain, a potential audit and heavy fines. Fortunately, Barn2Door has invested in tools and integrations to redress many of your concerns.
Here’s what you need to know about managing taxes online:
State: Taxes vary based on your state, type of business, product category and address. In some jurisdictions, taxes vary down to your specific city block.
Nexus: You must choose a ‘nexus state’, where your business claims taxes. Taxes in your nexus-state may be:
‘Origin-based’ - where the products are produced (your Farm), or
‘Destination-based’ - where the products are purchased (picked up / delivered).
Interstate Commerce: Shipping or delivering across state lines complicates your taxes exponentially. Additionally, some states have taxes on delivery or shipping.
These are just a few of the complexities around taxes, which is why most ecommerce solutions integrate with third-party solutions dedicated exclusively to providing tax services (Avalara, TaxJar, TaxCloud, etc.). Those integrations come with guarantees and protection, as well as real-time updates to tax codes and rates. However, they can be expensive depending on the nature and volume of your Farm business.
At Barn2Door, we exist to build the tools Farms need to sell online. Depending on the product categories and state, Farms we serve may have no taxes, some taxes, or many applicable taxes. Farms choose to fill product orders in a number of ways, from shipping to direct delivery and on-Farm pickup (all have different tax implications). Farms may sell only in their own ‘nexus’ state, or deliver and ship across state lines.
To serve the wide range of Farms we work with and to help lower costs, Barn2Door is excited to announce a new Tax tool for simple tax calculations!
Farms selling within Origin-based States can now enter tax rates based on customized product categories, as well as set rates for delivery or shipping on taxable items, per order. Who the Barn2Door Tax Tool works for:
Barn2Door Subscription Plans*: Business and Scale Farms
Farms in Origin-Based States (11)
Arizona, Illinois, Mississippi, Missouri, New Mexico, Ohio, Pennsylvania, Tennessee, Texas, Utah, Virginia
Farms who only sell in their own state (no business across state lines)
For Farms that don’t meet the above criteria, we offer integrations with third-party tax tools, Avalara and TaxJar, to accommodate more complex tax calculations involving cross-state business, Destination-based state tax rates, and changing tax rates.
We’re thrilled to continue saving Farms time with the tools they need to succeed online. Learn more about Barn2Door’s integrations, and watch how Barn2Door works in 5 minutes.
*Note: If you are a Barn2Door customer on a legacy subscription plan (prior to May 2020), please contact your Farm Account Manager to learn more about upgrading your subscription to utilize the free Barn2Door Tax Tool.