Nearly ever U.S. retailer will have a sales tax filing due in January. Why? Because even new or low-volume sellers are required to file sales tax in January.
This means that many sellers who only file sales tax once per year will be rushing to remember what exactly a sales tax filing means. These tips should help!
Know Your Sales Tax Filing Due Dates
In most U.S. states, sales tax filings are due on the 20th day of the month after the filing period. So in January, most states tax filings will be due January 20th. But quite a few states deviate from this norm. Some states want you to file on the 15th, others on the last day of the month, or the 23rd, or the 25th… You get the picture. Be sure to check your sales tax filing due date so that you file your sales tax returns on time.
Find your state or states here to check your January sales tax return due dates.
Why is it so important to file on time? For one, states will charge your penalties and interest if you’re late. Ouch! But about half the states with a sales tax will also provide you with a sales tax discount if you pay on time. While it isn’t much (usually just 1-2% of the sales tax you collected from in-state buyers), this discount is free money and a small reward for the hard work you do collecting sales tax from your buyers!
Report How Much Sales Tax You’ve Collected… The Easy Way!
Now that you know when your sales tax return is due, your next step is to gather up all the information you need to actually file.
Most U.S. states want to know not only how much sales tax you collected from buyers in the state, but how much you collected from buyers in each county, city and other special taxing district. Calculating this can be quite…. taxing!
That’s why a sales tax automation solution can help. Connect your online shopping carts and marketplaces just once, and you’ll be presented with a return-ready sales tax report. Use that information to fill out your sales tax filings in minutes, rather than spending your time poring over spreadsheets and each state’s confusing tax tables.
If you’re really strapped for time, you can even AutoFile your sales tax returns. Just enroll one time, and your sales tax filings will be taken care of for you before the due date, every time. AutoFile will even allow you to claim those on-time filing sales tax discounts you so richly deserve!
Give Yourself a Sales Tax Checkup
Sales tax is on nearly every online seller’s mind during January. Take this time to review your sales tax practices and be sure you’re all set to make sales tax filing easier next year.
- Double check your nexus – Sales tax nexus is just a fancy way of saying significant presence in a state. While every state’s definition of nexus is slightly different, you general have nexus in a state if you have a physical presence like an office or store there, personnel there, or inventory for sale there (among other factors.) Find out more about sales tax nexus.
- Ensure your sales tax permits are up-to-date – If you have nexus in a new state, be sure to register for a sales tax permit in that state. On the other hand, if you no longer have nexus in a state, you can also cancel your sales tax permit in that state. Also, if you’ve moved, or changed business entities, you may be required to update your sales tax permit with your state’s department of revenue.
- Pay attention to your filing frequency – This is the time of year when many states will change a seller’s filing frequency. Keep an eye out for a letter in the mail from your state’s department of revenue. Remember, how often you file sales tax is dependent on sales volume, so if your volume greatly increased or decreased during the year, the state may assign you a more (or less) frequent filing deadline.
I hope this post has helped you feel confident about weathering the January sales tax perfect storm! For more than you possibly every wanted to know about eCommerce sales tax, check out our Sales Tax 101 for Online Sellers Guide. For specific questions, join the conversation over at the Sales Tax for eCommerce Sellers Facebook group!
TaxJar is a service that makes sales tax reporting and filing simple for more than 5,000 online sellers. Try a 30-day-free trial of TaxJar today and eliminate sales tax compliance headaches from your life!
