Sales Tax Preparation
Local Requirements
Local Sales Tax:
Some states have local sales taxes, such as county or city taxes, that may need to be collected
and remitted.
Local Use Tax:
Local use tax may apply to purchases made from out-of-state sellers and used
within a specific locality.
State Requirements
Sales Tax Registration:
Register with the state tax authority in each state where you have nexus (physical presence
or
economic nexus).
Sales Tax Collection:
Collect sales tax from customers on taxable sales, based on the applicable sales tax rate
for
the sale location.
Sales Tax Exemptions:
Understand and apply sales tax exemptions for qualified purchases, such as those made by
government agencies, non-profit organizations, or businesses
purchasing for resale.
Sales Tax Returns:
File periodic sales tax returns (monthly, quarterly, or annually) and remit the collected
sales
tax is sent to the state tax authority.
Use Tax:
Collect use tax from customers who purchase taxable goods or services from out-of-state
sellers
and use them within the state.
Other Considerations
Nexus:
Understand the concept of nexus and determine if you have a tax nexus in a particular state.
Product Taxability:
Determine the taxability of different products and services based on state-specific rules.
Recordkeeping:
Maintain accurate records of sales, purchases, and tax payments.
Software and Automation:
Utilize sales tax software or automation tools to streamline calculations, filing, and
reporting.
