Sales tax isn’t a federal tax and each state has it’s own regulations, which makes it difficult to give hard and fast rules. What I’m giving you are some general guidelines and a list of questions that you need to answer for yourself in regards to your state. Google your state name and sales tax, and then a good place to look is the FAQ section.
- What is required for registration?
- What are the report filing requirements?
- On what does your state impose sales tax? Usually this is the sales of tangible property (something you can see, touch, etc.), but sometimes digital property is included.
- What is the state sales tax rate? Can there be additional sales tax for cities and/or counties?
- Which sales are exempt from sales tax? Commonly, sales of property for resale are exempt as long as you have a proper “resale certificate” from the buyer.
- Are interstate commerce sales exempt from your state’s sales tax?
- Does your state require sales tax to be collected on shipping and delivery?
- Are sales required to be broken down on a receipt between sale price and sales tax?
- If you have paid sales tax on items used to produce your property sold, do you get a credit? Can you request a refund of these taxes paid?
- Is there compensation/reduction for collecting and timely filing?
- How long does your state require you to keep records?
This is my little “down and dirty” calculation to come up with sales tax from only keeping up with total sales/receipts and with those that are exempt. Also, exempt might be shipping, if it is not taxable in your state. If you have numerous smaller sales, it is cumbersome to keep track of each sale. And sometimes you may sell an item without collecting sales tax (if it applies, you are still required to pay it even if you didn’t collect it). There are other ways of doing it, but you’re pretty much stuck with always keeping up with AT LEAST two items. You are going to need total receipts/sales for other tax reason, so that’s a given. Some keep up with total receipts and sales tax collected, and back into the other numbers. The key is to come up with a method that is easy for you, gets the state it’s due revenue and BE CONSISTENT.