There is not one single person in the world who finds Sales Tax interesting. Maintaining, filing and keeping records of sales tax is probably the most boring thing in the world. However, from a business point of view, it is also very important.
One of the major reasons why sales tax is complicated is because the rules and laws vary from state to state. It also varies from business to business. It is important that as a business, you maintain the proper paperwork as any lapses on that front might incur severe penalties from the authorities.
This is a major reason why businesses, both big and small, take help from sales tax consultants. These consultants offer a specific function of accounting known as sales tax services.
5 Important things you need to know about Sales Tax Service: The List
1. Ensure that you are following the State Tax Laws of your own state-
When you see the states of the American Federation, it is important to note that every one of them have their own state tax laws. Whatever sales tax service you are going for should be following the local rules, laws and regulations of the state in which your business is operating.
2. You need to collect Sales Tax from people where you have a Nexus-
Your business might be stationed in a particular state, but have its area of operation in other states. In such a case, it is imperative that you collect state tax from your buyers in other states. Nexus Laws are not only important but have been enforced by the Supreme Court. Ecommerce companies operating in different states need to pay attention to Nexus Laws.
3. Different businesses and items are taxed differently in different states-
A clothing company based in Texas and one that is based in California will have different state tax laws. It does not only depend on the type of business, but also on the type of items. For example, agricultural products in different states are taxed differently. Your sales tax service agency should be aware of these intricacies.
4. You need to file a Sales Tax Return even though you did not collect State Tax-
Your Sales Tax Consultant needs to be aware that you need to file a Zero Sales Tax Return in the event of zero sales tax collected. If you have a permit for the state, then filing state tax returns is necessary. While many businesses fall into this loophole, it might result or attract serious penalties from the authorities.
5. Enquire whether you can get a Sales Tax Discount in a particular state-
The process of collecting, filing and maintaining state tax laws is tedious. State governments realise that and award you by granting you a sales tax discount. Be sure to check with your Sales Tax Support Company or consultant about the discount. Other states also allow companies to keep a share of the sales tax proceeds.
Small businesses too need to maintain their sales tax records. However, from an owner’s perspective, the entire process is sure to take up a lot of time, effort and energy. All these resources can be better invested in growing the business and developing new products.
This is the reason why businesses take help from expert sales tax consultants to help guide them. This not only saves time, but also ensures no fines or penalties are imposed on the business.