July is what we here at TaxJar call a “sales tax perfect storm.” Nearly every online seller will have a sales tax filing due date this month.
If you’re new to sales tax, or if it has been awhile, check out these 5 simple tips for conquering July sales tax filing:
Know Your Due Dates
Since sales tax is governed at the state level, the actual day of the month you pay can vary. In the majority of states, sales tax is due on the 20th day of the month after the taxable period. But some states want to hear from you on the 15th, or the last day of the month. This date can also change due to holidays. Check your July 2016 sales tax due dates here.
Make Sure You Collected the Right Amount
When filing, the state expects you to remit how much sales tax you “should have” collected, even if, for some reason, you were unable to collect the correct amount. (For example, eBay’s sales tax system only allows you to collect sales tax at one rate per state, which means that you often have to charge either too much or too little sales tax to buyers.) If you find yourself in a situation like this when filing your sales tax return, double check that you are filing what you should have collected. If you’d rather not pore over your individual sales by hand, TaxJar has a simple “estimated sales tax due” report that will help you with this!
File “Zero” Returns
If you are registered for a sales tax permit in a state, be sure to file a sales tax return even if you didn’t collect any sales tax over the taxable period. States want to hear from you on every due date. They consider this a “check in.” If you don’t file a sales tax return, you could end up with consequences from a $50 fine to the cancellation of your sales tax permit. Nobody wants to pay a $50 fine when you didn’t have any sales tax to remit in the first place!
Don’t Discount Sales Tax Discounts
About half the states also realize that asking you to collect, report and file sales tax places an administrative burden on sellers. For this reason, they allow you to keep a very small percentage of sales tax you collected. This amount is usually 1-3% of the total, but can add up over time. Don’t leave money on the table!
Automate Future Filings
If you find yourself spending valuable hours on sales tax filing that you could be using to work on more profitable business activities, then you can automate your sales tax filing. TaxJar AutoFile will file your sales tax returns for you in almost every state for just $19.95 per state per filing. Not sure automating sales tax filing is right for you? Check out 6 Reasons to AutoFile Your Sales Tax Returns.
Have questions or comments about sales tax? Join the conversation at the Sales Tax for eCommerce Sellers Facebook Group!
TaxJar is a service that makes sales tax reporting and filing simple for over 5,000 online sellers. Try a 30-day-free trial of TaxJar today and eliminate sales tax compliance headaches from your life!