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Sales & Use Tax Compliance

Source Advisors offers sales and use tax compliance solutions, allowing clients to focus on core business priorities, requiring specialized expertise and constant regulation attention.

Sales & Use Tax Compliance

Source Advisors offers sales and use tax compliance solutions, allowing clients to focus on core business priorities, requiring specialized expertise and constant regulation attention.

What is Sales and Use Tax Compliance?

Sales and use tax compliance is a critical responsibility for businesses operating across multiple states and jurisdictions. With complex regulations, varying filing deadlines, and constant legislative updates, maintaining compliance can be overwhelming. Failing to file accurately or on time can result in costly penalties, interest, or even audits.

That’s why partnering with an experienced compliance team is essential. Source Advisors helps businesses of all sizes simplify and strengthen their sales and use tax compliance strategy—ensuring accuracy, timeliness, and peace of mind.

The Sales and Use Tax Compliance Process

Sales Tax Registration

Sales Tax Registration

  • A business must first register with the state (and in some cases local jurisdictions) where it has nexus—a legal connection requiring tax collection.
  • Nexus can be physical (offices, employees, inventory) or economic (meeting a sales or transaction threshold).
Determining Taxability

Determining Taxability

  • Identify which products or services are taxable. Some items (like groceries or digital goods) may be exempt or taxed at different rates depending on the state.
  • Businesses often need to track exemptions (e.g., resale or nonprofit sales) and keep proper exemption certificates on file.
Collecting Sales Tax

Collecting Sales Tax

  • At the point of sale, the correct tax rate must be calculated and collected from the customer.
  • Rates can vary widely by state, county, and city, so using updated rate tables or automation software is common.
Filing Returns

Filing Returns

  • Businesses must prepare sales tax returns that summarize taxable sales, exempt sales, and total tax collected for the period.
  • Returns are submitted to each taxing jurisdiction by their required due dates (monthly, quarterly, annually).
Remitting Tax

Remitting Tax

  • Along with filing, the business remits the collected taxes to the state (and sometimes directly to local authorities).
  • Some states require electronic payment; others allow checks.
Managing Compliance Systems

Managing Compliance Systems

  • Many companies implement automation software to track changing rates, manage exemption certificates, and streamline reporting.
  • Internal controls help prevent errors and reduce audit risk.
Audit Readiness

Audit Readiness

  • State tax authorities may audit businesses to confirm proper collection and remittance.
  • Businesses must keep detailed records (invoices, exemption certificates, filed returns, payment confirmations) typically for 3–7 years.

Our Sales & Use Tax Professionals

With over 40 years of experience, Source Advisors has been a trusted partner for businesses facing sales and use tax compliance. Our professionals know that even small compliance errors can result in significant assessments, penalties, and interest. 

Contact Us

Speak with a Sales & Use Tax Specialist

Sales and use tax compliance management is no easy task. It requires specialized expertise and constant attention to ever-changing regulations. At Source Advisors, we provide sales and use tax compliance solutions so our clients can focus on their core business priorities.

Get in touch with Source Advisors about our Sales & Use Tax services.

Sales & Use Tax Compliance FAQs

What is Sales and Use Tax Compliance?

Sales and use tax compliance refers to the process of properly registering, collecting, reporting, and remitting state and local sales and use taxes. It also includes staying current with changing laws and meeting filing deadlines to avoid penalties.

Why is sales and use tax compliance important?

Non-compliance can result in financial penalties, interest, and reputational damage. With states increasing audit activity and relying on automation to detect errors, maintaining compliance is more important than ever. 

How can Source Advisors help with sales tax registrations?

Our team identifies the jurisdictions where your business has nexus, manages the registration process with state and local agencies, and ensures that your company is set up correctly to collect and remit taxes.

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