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.