Federal Income Tax Day, April 18th, looms large in everybody’s mind right now. Too bad sales tax doesn’t come with a deadline that simple.
State sales tax filing obligations come in a dizzying number of deadlines for you to follow (potentially with bad consequences if you don’t). And generally, the higher the volume of tax you’ll be reporting, the more often you have to file.
A regular schedule – unless it’s not
When filing sales tax returns, due dates can include the 7th, 10th, 15th, 20th, 30th and the last day of the month (without considering the odd due dates for certain states). Returns are typically due monthly, quarterly or annually and usually set when you register, but may change periodically. Changes in deadlines are usually sent as notices.
That’s the typical schedule, but nothing’s simple in sales tax. Some states have more unusual frequencies, including semi-annual and bimonthly. Depending on the tax jurisdiction and the amount of tax reported, you may catch a break and need to file no more than once a year – or you may have to start filing the minute you register.
Some jurisdictions take prepayments, which are often for larger amounts and on a different filing schedule. In some states, you also don’t even have to owe tax to incur a filing requirement. By registering you are stating that you will be sending returns, and if you don’t have a requirement, this could just be a zero due return. Not difficult, but still takes time and consideration.
Other factors can affect due dates: holidays, state furlough days and natural disasters, to name a few. Last year for example, Texas, hammered by winter weather and power outages, pushed its February deadline for filing and paying state taxes and fees (including sales and use taxes) to March.
It also pays to keep your eye on headlines and the overall economy. Sales tax holidays, for instance, are periods of no sales tax on certain products, such as school supplies or hurricane-preparedness items. Right now, several states are considering additional sales tax holidays as their residents’ weather inflation and high gas prices.
In your toolbox
How exactly can you deal with such a universe of different schedules?
First, you need an accurate tax calendar telling you where you’re registered for sales tax purposes, the filing frequency of each return, the due date, login credentials, method of filing (e-file or paper) and any other information specific to the jurisdictions where you have nexus.
Obviously, keeping on top of your sales tax deadlines involves a lot more than just looking at a calendar and if it’s something you or your team can no longer keep up with, it may be time to outsource or change providers. Many businesses find themselves still keeping up with this information and having to reach out to their software provider when notices arrive for changes to deadlines so that their systems can be updated to file correctly. A good bit of the work still ends up in their lap, but by relying on a service provider who actually takes over the process for you, including managing your filing calendar and responding to notices, you’ll be able to focus on more important tasks to your business.
Contact TaxConnex to learn what it means when sales tax is all on us.