I love America and the spirit of American’s during the pandemic. This was a time of uncertainty and rising unemployment, and I witnessed people doing what was needed to keep food on the table and the bills paid.
Entrepreneurs were turning to their side hustle to make ends meet. One only needs to be on Facebook for a few minutes to see a slew of new photographers, furniture makers, or individuals looking for houses/offices to clean and yards to mow. I applaud their entrepreneurship but they have opened themselves to potential sales tax liability in the State of Arkansas, as all are performing taxable services.
If you have noticed the swell of individuals going into business you are not alone. The State of Arkansas has a Nexus and Discovery Section that scours the internet looking for businesses not registered and reporting tax. In the last 30 days we have added three new clients due to the Nexus and Discovery Section sending out inquiries about business activities. The Nexus and Discovery Section prowls around Facebook, Air BNB sites, and VRBO sites looking for leads to broaden the tax base. This unit does not always rely on what they discover but they also use leads from competing businesses that have been around for years but are now noticing that these upstarts are cutting into their revenues.
Please talk with your tax professional before embarking on a side hustle or just give our firm a call for information. Stay informed and keep hustling because that is what makes us great.