Articles explaining sales tax rules, economic nexus, reporting responsibilities, and compliance topics that affect businesses collecting and remitting sales tax across different states.
To update business details on a sales tax account, contact the state or local revenue agency that administers the registration and use its designated online, written, or account-specific update process. Do not assume that changing an EIN record with the IRS will…
There is no single nationwide retention period for sales tax records. A business should keep records for the period required by each state or local jurisdiction where it is registered or has a sales tax collection obligation. Some jurisdictions require a longer…
A sales tax prepayment requirement means a taxing authority requires a business to pay part of its sales tax liability before the return for the full reporting period is due. The prepayment is an interim payment, not a substitute for the return.…
When a customer returns a taxable purchase, the seller generally needs to reverse the sales tax associated with the amount refunded and report the adjustment in the manner required by the state where the sale was reported. The key is to connect…
A sales tax vendor discount is an amount that an eligible seller may retain when it files a sales tax return and pays the tax on time under the governing jurisdiction’s rules. It may also be called a dealer discount, collection allowance,…
Use tax is generally the purchaser-side counterpart to sales tax. It may become due when a taxable purchase is used, stored, or consumed in a state but the seller did not collect the sales tax that would otherwise apply. An exemption may…
Yes, a sales tax return can generally be corrected after filing, but the procedure depends on the state and the type of correction. A revenue department may let you amend the original return electronically, require a marked paper return, or direct you…
A state sales tax audit may be triggered by missing returns, inconsistent sales figures, unusual credits or exemptions, exemption-certificate problems, prior audit issues, referrals, complaints, or risk-based screening. An audit can also be selected randomly. There is no single nationwide trigger because…
To close a sales tax account after you stop selling, contact the revenue agency for every state and applicable local jurisdiction where the business is registered, follow that jurisdiction’s current account-closure procedure, submit any return or payment the agency requires, and keep…
For a sales tax audit, keep records that let an auditor trace each filed return from the reported totals back to individual sales, purchases, exemptions, tax collected, and payments. A strong file normally includes transaction-level invoices or receipts, purchase records, resale and…