Consumers complain about sales taxes, but they are an even bigger headache for businesses who must calculate and remit these funds on a broad range of products – in some areas services as well – to a dizzying array of government entities. Even if there is no state levy, you may find that cities, counties or special taxing jurisdictions (e.g., lodging, transportation areas) demand you collect and remit sales taxes.
There are three steps you can take to ensure that your business meets its sales tax responsibilities:
Get the scoop on sales taxes
Although sales taxes are administered at the state (or lower) level, there are a couple of Internet sites that offer an overview of these taxes.
I recommend: CCH's Business Owner's Toolkit leads the online pack in providing a good discussion of sales taxes and how they affect small business.
Find state-specific sales tax data
Find out what your state or locality demands.
I recommend: CCH provides links to each
state's tax department where you can get specifics on rates and filing/payment requirements. If you're looking for regular updates on changes to state sales tax laws, you'll want to regularly visit Vertex's
Tax Cybrary and/or sign up for the company's free newsletters for regular email alerts. The
Federation of Tax Administrators annually updates its table of state sales tax rates. And tax publisher
RIA/Thompson puts out its handy "
Guide to Sales and Use Taxes" each year.
Get help collecting and remitting sales taxes
Because sales taxes are continually collected and must be regularly remitted to various jurisdictions, you'll want to at least look into outsourcing the job.
I recommend: The browser-based
Sales Tax O Series from Vertex offers a system of tracking, collecting and sending in your various sales taxes.
Tax Partners provides a
white paper detailing its sales tax services so you can see if it's the right route for you. And CCH, in addition to its editorial outline of sales taxes, also offers companies a
sales tax compliance program, with special options for particular industries (e.g., restaurants, manufacturing, etc.).