Key takeaways
- Expand your services digitally: Virtual SUT advisory lets accounting firms reach more clients nationwide and offer high-value compliance guidance remotely.
- Capitalize on post-Wayfair demand: As e-commerce grows and nexus rules evolve, businesses increasingly need expert help understanding multi-state tax obligations.
- Leverage smart technology: Tools like LumaTax automate nexus detection and compliance analysis, helping firms scale advisory services efficiently and securely.
Accounting firms can level up their line of service by offering virtual sales and use tax advisory.
In short: Since the 2018 Wayfair ruling, many businesses selling online don't know their sales and use tax (SUT) obligations. Virtual SUT advisory lets your firm help clients across the country stay compliant and grow. The right technology makes it easy to spot which clients need help.
Technology and digitalization have changed the financial services industry hugely in the 21st century. An article in Investment Monitor says the Covid-19 pandemic only strengthened the industry’s growing reliance on digitalization. Technology has transformed how accounting firms can serve their clients.
At the same time, more and more small and medium-sized businesses (SMBs) are moving into e-commerce to sell goods and virtual services. They all need guidance on their obligations and liability.
This freedom, made possible by technology, comes with a lot of rules and regulations. The 2018 Wayfair ruling brought big changes to how nexus is determined in the U.S. This changed the way businesses must pay sales and use tax.
The many new rules also created openings for accounting firms willing to guide business owners on sales and use tax (SUT). Not enough firms take up these openings. Yet offering SUT advisory is a great way for firms to improve their virtual offerings. Learn more about Taxually for accounting firms.
Why Offer Virtual SUT Advisory Services?
The U.S. Census Bureau began tracking online sales in 1999. Since then, they’ve risen steadily year over year. The second fiscal quarter of 2020 was the height of the pandemic. In that quarter, e-commerce sales hit an all-time high of 15.7 percent of total retail in the United States.
There was a slight dip at the start of 2021 as physical stores began to re-open. But data suggests online sales will stay a big share of retail sales in the U.S.
As e-commerce grows, more businesses will be affected by different nexus rules as they sell across taxing jurisdictions. Nexus rules vary from state to state, and sales tax rules across the U.S. are hard to navigate. So many companies are likely unaware of their actual sales and use tax obligations. Related reading: LumaTax has joined the Taxually Family.
It can be hard for businesses to know when nexus laws change. It’s also hard to keep up with the different nexus thresholds that now exist because of the Wayfair ruling. It’s even harder to know whether they have reached economic nexus in a state, and whether they should pay sales and use tax there. This is because every state has a different threshold for collecting sales and use tax.
Some states might require businesses that do $100,000 or more in transactions to pay SUT. Others might set that number at $500,000. Businesses also need to watch how many sales they make in each jurisdiction. The total number of transactions can also affect whether they need to pay SUT. Without help from a qualified accountant or tax advisor, it’s easy for companies to become non-compliant, even by accident.
Firms that aren’t actively helping their clients become SUT compliant are doing them a disservice. Non-compliance can lead to penalties and fines. Offering virtual SUT advisory goes beyond compliance. Compliance might mean helping clients fill out the sales and use tax forms that regulators require. SUT advisory goes a step further. It draws insights from the client’s financial data to build strategies that help their business grow.
Businesses of every size keep expanding into e-commerce every day. So offering virtual SUT advisory lets firms help a wider range of clients from all over the country.
How Can You Engage With Clients Virtually?
Firms, CPAs, and advisors who don’t offer virtual services are missing out. Clients may want to work with an accountant virtually for many reasons. They might live too far from the nearest accountant. Or they may be struggling to find an accountant in their own city who shares their values and understands their needs. Letting clients work with you virtually helps you serve them better. It also makes SUT advisory easier to access for SMBs across the country.
When you work remotely for clients, it’s critical to use a virtual private network (VPN) to protect sensitive client data. A VPN also protects against cyber-attacks and helps build client trust. It is an important part of offering high-level virtual services.
Also, make sure you use the most up-to-date technology. It helps bridge the gap between outsourcing SUT work and offering it as a service to clients. Firms that use technology well can make remote work easy and help their clients stay SUT compliant.
Why Adopt the Latest Technology?
Using the latest apps and software is crucial if your firm wants to add any virtual services. Technology makes it easier to work with clients by automating manual tasks. It also makes sure the data clients share is shared securely.
LumaTax’s tools and technology make it easy for accountants to work with clients to find their economic nexus exposure. LumaTax takes the time out of sales tax services. It automatically compares transaction data to state tax thresholds to see whether nexus has been established. For a closer look, see What Do Sales Tax Changes Mean for Your Clients?.
Our industry-first client exposure survey creates a LumaTax Compliance Score for each business. This shows which clients most need SUT advisory services. In the process, it also gives firms a picture of the revenue opportunities that go with them. If you know exactly which of your clients aren’t SUT compliant, it’s easy to offer them help and avoid surprises in the future.
Offering virtual SUT advisory services is an easy way for firms to level up their services and stand out from other firms. By using the latest technology and learning how to engage with clients virtually, firms can help a wider range of clients become sales and use tax compliant. Read more in our guide: How To Scale a Profitable SALT Practice.
How Taxually handles this
Taxually’s LumaTax runs a nexus analysis on your sales, helps you register in the states where you must collect, and prepares and files multi-state sales tax returns, including Canadian GST/HST. LumaTax is currently available to enterprises and accounting firms. For the full workflow, read how to automate US sales tax filing in every state.
Related guides
Frequently asked questions
What is virtual SUT advisory?
Virtual sales and use tax (SUT) advisory enables accounting firms to help clients manage multi-state tax compliance remotely using digital tools and secure online collaboration.
Why should firms offer virtual SUT advisory?
E-commerce growth and evolving nexus laws have increased client demand for tax guidance. Offering SUT advisory helps firms prevent client noncompliance while expanding their own service offerings and revenue potential.
How can technology support virtual SUT advisory?
Tools like LumaTax automate nexus detection, assess compliance exposure, and securely analyze client data—making it easier for firms to deliver efficient, scalable, and high-value virtual tax services.
