Your Sales and Use Tax Compliance questions, answered.
Ensuring your business collects and remits the correct amount of sales tax (on sales) and use tax (on purchases used in your state) to the appropriate authorities.
Compliance is crucial to avoid penalties, interest charges, and potential audits. It also fosters fair competition and ensures accurate government revenue collection.
Businesses selling taxable goods and services within a state and/or using taxable goods/services in a state where they have no physical presence.
Varies by state, but generally includes any tangible personal property (e.g., office supplies, appliances) and certain services (e.g., hotel stays, haircuts).
Rates vary widely by state and locality – there are currently over 13,000 sales tax jurisdictions in the U.S.
Typically, you add the sales tax amount to the customer’s purchase price and collect it at the point of sale.
Yes. Contact your state’s tax authority for registration requirements.
File returns and submit collected tax to the appropriate authorities according to their timelines.
Not all states require a separate use tax permit but research the requirements in your state.
Apply the applicable use tax rate to the purchase price of the item and remit the tax to the state.
Generally, no. States have various mechanisms to collect use tax on out-of-state purchases.
Certain items and transactions may be exempt from sales and/or use tax. Research exemptions relevant to your industry and location.
Learn about Tax Exemption Certifications here.
