Sales Tax Management: Bookkeeping Tips

Sales Tax Management: Bookkeeping Tips

If you sell tangible and sometimes intangible goods, you are more likely to have collected sales tax from customers on behalf of the state. Before diving into the subject, you should be aware that some states do not collect sales tax after purchases. These states are commonly called NOMAD, which stand for New Hampshire, Oregon, Montana, Alaska and Delaware. But for states that do collect sales tax, many wonder where to begin.

First, you need to acquire a seller’s permit from your state website. This permit is usually free of cost and requires the individual, corporation or partnership personal information, such as the social security, EIN, mailing address and the manager information. Businesses can designate an experienced and trustworthy individual who works in the company to handle the sales tax filing on each due date. 

Second, it can be tiring and time consuming to keep track of the sales tax collected in a company that has high sales volume. Businesses can use a point of sales software that tracks the sales tax collected at each purchase and an accounting database to report the sales tax collected to accurately manage sales tax. Learning to properly record and keep track of sales tax will differentiate you from your competitors and prevent you from accrued sales tax penalties and liabilities.

Third, save the deadlines on your calendar for the sales tax filing to avoid accruing penalties and interest. Some states, like California, suspend your seller’s permit after omitting to file for 4 consecutives quarters or a year. Per California state requirement, businesses should file a $0 income sales tax return, even if they did not make any sales. 

State Tax Agencies Cheat Sheet (NOMAD excluded):

  1. Alabama – link
  2. Arizona – link
  3. Arkansas – link
  4. California – link
  5. Colorado – link
  6. Connecticut – link
  7. Florida – link
  8. Georgia – link
  9. Hawaii – link
  10. Idaho – link
  11. Illinois – link
  12. Indiana – link
  13. Iowa – link
  14. Kansas – link
  15. Kentucky – link
  16. Louisiana – link
  17. Maine – link
  18. Maryland – link
  19. Massachusetts – link
  20. Michigan – link
  21. Minnesota – link
  22. Mississippi – link
  23. Missouri – link
  24. Nebraska – link
  25. Nevada – link
  26. New Jersey – link
  27. New Mexico – link
  28. New York – link
  29. North Carolina – link
  30. North Dakota – link
  31. Ohio – link
  32. Oklahoma – link
  33. Pennsylvania – link
  34. Rhode Island – link
  35. South Carolina – link
  36. South Dakota – link
  37. Tennessee – link
  38. Texas – link
  39. Utah – link
  40. Vermont – link
  41. Virginia – link
  42. Washington – link
  43. West Virginia – link
  44. Wisconsin –link
  45. Wyoming – link

Eneya Accounting provides sales tax management services. In order to maintain accurate books, you should accurately keep track of your sales tax liabilities. Schedule your consultation here or give us a call 949-529-0740.