Understanding Sales Tax Filing Periods & Frequency by State

Sales tax, unlike other types of taxes, has many deadlines, not once or twice a year, but often every month and it doesn’t fall on the same day for every business, or state.

With sales and use tax compliance, there are six primary deadlines each month – 7^th, 10^th, 15^th, 20^th, 25^th and 30^th – without considering the odd due dates for certain states – 12^th, 23^rd, 24^th, etc.  

Not to mention, the process of reporting sales tax and the amount of information required on each return varies with each state and local jurisdiction.  Returns are typically due either monthly, quarterly, or annually. But some states have more unusual frequencies, including semi-annual, bi-monthly, occasional, and let’s not forget the weekly prepayments. In most cases, the higher the volume of tax to be reported, the more often you are required to file and pay.

Some states (for example, New Jersey) have a flat sales tax rate that applies throughout the state. As a result, the New Jersey sales tax return is quite simple – requiring only the gross sales, exempt sales, taxable sales, and sales tax. Other states (for example California) have local taxes that are reported on the state return. In this situation, the taxpayer is required to list all local taxes that were collected by jurisdiction.

Still other states (for example Alabama, Colorado, and Louisiana) have home-rule jurisdictions where separate returns may need to be filed at the local level. It would not be unusual to have as many as 50 different returns filed in each of these three states.

Because of all of these complexities, it’s critical to maintain an accurate tax calendar that reflects where your business is registered for sales tax purposes, the filing frequency of each return, the e-file login credentials, and other state-specific information.

Many people rely on software companies to manage these complexities, but the tax calendar is not a static item. It will need to be maintained and updated over time as your sales tax filing frequencies may change or you may register in additional state or local jurisdictions.  If you fail to tell your software company that your filing frequency has changed from quarterly to monthly, and they file the returns late, that’s on you – not them.

Sales tax is more complicated than ever. And what’s worse is that everyone who says they’re simplifying sales tax is still leaving the hardest parts – and the liability – up to you.

Don’t let sales tax compliance overwhelm you. Rely on sales tax experts to maintain your compliance. Contact TaxConnex to learn what it means when sales tax is all on us.