How to Report and Pay Sales Tax

If you sell products or services, you may be required by your state to collect sales tax at a specific rate set by the state. This is in addition to the price of your goods or services. When you collect sales tax, you are doing so on behalf of the state. You are required to submit this money back to the state within a specific time. Sales tax is therefore known as a trust fund tax, according to tax lawyers. The following states do not charge sales tax:

• Oregon
• Alaska
• Delaware
• Montana
• New Hampshire

Businesses in other states are required to pay sales tax to their respective state department of revenue. Tax attorneys, as a rule, dictate that you are required:

• To charge sales tax on goods and services sold within your state or to state residents.
• Pay sales tax when the service is rendered or when the products are given to the customer, and not when payment is made.
• Charge sales tax in addition to the price of the products or services you are selling.

If you have any questions about this you do not want to get in over your head. You need a tax lawyer. You need legal help and it does not hurt to speak with a tax lawyer for an hour or so. Click right here Tax.USAttorneys to make this happen. Legal help is right around the virtual corner.

The Law

You are not allowed to indicate to customers that you are absorbing the amount to be paid as sales tax but everyone already knows that that extra is sales tax. Apparently politicians are trying to be clandestine here. Tax lawyers point out that as per law you may include sales tax in the price of your products or services, however, you are required to put up a notice or indicate on the receipt that the price is inclusive of sales tax. But everyone knows there is a sales tax.

Everyone knows that the cost of that Burger King hamburger, Transformers DVD, flat screen, loaf of bread, Red Vine package, desk fan, rock for your front yard, car seat covers, Armor All, new back bumper, pair of socks, Tom Clancy novel, bottle of Gatorade, and so on will be more than the price indicated on that package. Who does not know about sale’s tax?

No one likes sales tax. It may not be that big of deal for a small item like a used Lee Child or Patricia Cornwell book but when you are buying a new F-350, the sales tax is massive. If sales tax was waived for large ticket items, how many more transactions would be made? It would probably be considerable but that is another topic.

The states that do not have a sales tax probably have higher real estate taxes, they make it up somewhere else. States with the most jobs and better economies are the states with lower taxes and less anti-business regulations.

How to Collect, Report, and Pay State Sales Taxes

You will need to set up a process whereby you collect and pay sales tax on time. To begin with you will need to register with the state Department of Revenue for a sales tax permit. Most states allow you to register online. In order to register you will need to disclose your Federal Employer ID Number and details of your business and its owners.

You can begin to collect sales tax after you receive a sales tax permit. This amount must be shown separately in order for the customer to identify the amount of tax he or she is paying. If you sell products in several cities or counties within your state then you are required to collect the appropriate amount from each area. If you are selling your products or services in several states, you will need to program your collection for each state. You are also required to keep records of sales tax received, which will go into the "Sales Tax Payable" liability account.

If you have a high volume of sales, you may be required to make monthly payments. Therefore, you ought to check with your state as to the frequency of payments. The sales tax laws require that you file sales tax reports periodically with your state’s Department of Revenue.

Most states allow sales tax returns to be filed online. Some states encourage prepayment of sales taxes and offer discounts to entrepreneurs that do so, which is a fantastic way to save on taxes. You need not collect sales tax if you are selling products or services to a reseller. However, make sure you have a copy of the reseller’s permit in order to avoid any problems.

If you have any issues with sales tax or need help in dealing with the IRS, make sure to reach out to a tax lawyer. Your legal representative will be able to identify the best approach and strategies to deal with any type of tax problem.