State Sales Tax Filing: Due date, Applicability, and Filing process
Apr 9, 2024
State sales tax filings are periodic obligations for businesses registered in any given state to collect sales tax from customers and remit those payments back to the state in question. The tax supports state-funded services, ranging from education to healthcare, and state-funded pension plans.
The process involves calculating the sales tax collected, deducting permissible credits, and remitting the net amount to the respective state's taxation authority. With filing frequencies typically dictated by the volume of sales—monthly, quarterly, or annually—staying ahead of due dates and understanding each state's specific filing requirements are key to avoiding penalties and interest on late or inaccurate filings.
What is the state sales tax filing?
State sales tax filing is the process where businesses report and remit the sales tax they've collected from customers to the state. It's an essential step in fulfilling the responsibilities that accompany operating a business or selling goods/services in a state. This process ensures transparency and accountability in sales tax collection, aiding in the efficient allocation of tax revenues to public services.
Who needs to file state sales tax?
Businesses that have registered for state sales taxes for any reason (physical/economic nexus or voluntary registration) within a state are required to file. This encompasses entities that sell taxable goods or services, whether they operate brick-and-mortar stores, online platforms, or both. The obligation persists as long as the business maintains its registration and nexus within the state.
Why is filing state sales taxes important for your business?
Regulatory Compliance: Avoids legal issues and penalties associated with non-compliance.
Financial Health: Proper management of tax liabilities supports the business's overall financial planning.
Reputational Integrity: Demonstrates your business's commitment to adhering to laws and supporting community infrastructure through tax contributions.
State sales tax filings due dates
Filing deadlines vary by state and the business's assigned filing frequency, but generally fall on the 20th or the last day of the month following the reporting period. Businesses should consult their state's taxation authority for specific dates and any changes to the filing schedule.
Need help with sales tax filing deadlines? Commenda’s Compliance Calendar tracks your key tax filing dates so you don’t have to.
How to file state sales tax filings:
Calculate taxable sales: Compile all sales data, distinguishing between taxable and non-taxable transactions.
Determine collected sales tax: Sum up the sales tax collected from customers during the reporting period.
Apply deductions and credits: Subtract any allowable credits (e.g., for previously paid taxes on returned goods).
Complete state forms: Use the state's prescribed forms or online portals to report sales and taxes collected.
Remit payment: Pay the due taxes, ideally before the deadline to avoid penalties and interest.
Common mistakes
Late filing: Missed deadlines can lead to penalties and accrual of interest.
Inaccurate calculations: Errors in tax calculation may result in under- or over-payment and necessitate corrections.
Failing to file for zero sales: Even if no sales were made, most states require a "zero filing" to maintain compliance.
Filing state sales tax is an integral part of a business's operational responsibilities, ensuring that collected taxes are accurately reported and remitted to support state functions. Familiarity with state-specific requirements and diligent preparation can streamline this process, reinforcing your business's standing as a compliant and community-supportive entity.
