Direct Sales and MLM

MLM Sales Tax

By
Kevin Thompson

In this three minute video, I answer the following questions about MLM sales taxes:

  • When is a company obligated to collect and pay sales taxes?
  • Why are distributors taxed based off the suggested retail price instead of the price they actually pay (wholesale)?
  • Are all dot coms exempt from collecting and paying sales taxes?

I hope you find the video informative. Also, since I'm not a tax professional, I thought now would be a good opportunity to introduce you all to Joe Craft. Joe is a MLM Accountant and owns Craft Financial Solutions, LLC. He's a CPA that understands the industry very well. He has also been a speaker at our MLM Startup conference, the Direct Selling Edge. If you have more questions about taxes, he's the man to contact.

Joe Craft

Good job, Kevin. I think your summary in the video is great. It's important for all direct selling companies to be aware of their obligations concerning sales taxes. There are nearly 8,000 jurisdictions in the United States that impose a sales tax. The issues are very complex. The companies need to determine if they're "retailers," they need to be aware of the various registration procedures, they need to determine if their products are exempt from sales taxes in certain states, they certainly need to be familiar with the tax rates and they also need to understand the filing requirements for each jurisdiction. If one of your readers want to schedule a free consultation, they can reach me by email at: joe@joecraftcpa.com.

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