Should you be collecting sales tax on your sales? Here is a simple guide to determine if you should collect sales tax and how to set it up:
- Check the website for the comptroller in your state to find what products and services are subject to sales tax in your state.
- If you find that either your products or services are taxable, register for a sales tax license on the website of your state’s comptroller
- Once you are registered, set up your invoicing or POS software to collect sales tax automatically on your sales. Look up your software’s help guide or contact their support team to get step-by-step instructions on how to set up sales tax in their software.
- As your invoicing or POS software collects sales tax, make sure to set that amount aside so that you don’t accidentally spend it. If you have a business savings account this is a great use for it.
- File & Pay sales tax periodically through the website for your state’s comptroller. Sales tax can be filed quarterly, monthly, or annually. How to determine your filing schedule and the due dates can be found on the comptroller website for your state. If there are no factors given to determine your filing schedule, assume quarterly unless your comptroller sends a letter or other form of communication informing you of your filing schedule.
If these steps seem overwhelming, I’d highly recommend hiring an accounting professional or utilizing a filing service such as Taxjar or Avalara.
If you would like 1-on-1 help to learn how to file sales tax or would like someone else to take it over so that you have more time doing what you love, schedule a discovery call with me at https://calendly.com/pegasusaccounting.