State Sales Tax Filings
State Sales Tax Filings
The term “sales tax” refers to the additional percentage charge added to the final price of a purchase in the United States. Unlike a traditional sales tax, which is paid by the business making the transaction, a consumption tax is paid by the final consumer of the product.
A company must collect sales tax in any state or locality with a sales tax nexus, which can be established by either a physical presence or a threshold level of sales. The federal government does not collect sales tax; instead, state and municipal governments do it on behalf of the government.
Generally speaking, most retail store purchases of consumer products are subject to sales tax in states that impose such a tax. Medications and food purchased for personal use sometimes do not incur sales tax in these states. The threshold at which sales tax must be collected and paid to the government can vary from state to state. Where sales tax is not the norm, such as outside the United States, excise taxes or a value-added tax (VAT) may be levied.
How Do State Sales Tax Filings Work?
The amount of sales tax that a person is required to pay varies from state to state, as does the list of items that are and are not subject to sales tax. In most cases, the seller is the one who is responsible for collecting the tax from the buyer, which is then handed over to the relevant state or municipal tax authorities. Here are some examples of the various sales tax methods used by states.
Consumer tax states
The term “consumer sales tax” refers to the imposition of a tax on an individual customer during a retail transaction. Consumer retail sales taxes are the buyer’s responsibility, and the seller must collect the tax on the state’s behalf. The majority of states that levy a consumer tax, such as Vermont, West Virginia, and Oklahoma, do not allow retailers to be responsible for collecting the tax on customers’ behalf.
Vendor privilege tax states
When a state has a vendor or seller privilege tax system, the seller must pay a fee to conduct business there. A company has the option of “absorbing” (personally shouldering) sales tax or “passing it along” to its customers. Businesses can choose to “eat the tax” in places where doing so is legal, such as Michigan, Missouri, and South Carolina. However, in jurisdictions that impose a privilege tax, like Connecticut and Kentucky, the retailer must charge the buyer the tax at the register.
Gross receipts tax (GRT) states
In place of collecting sales tax, tax-free states such as Washington and Delaware compute a gross receipts tax (GRT), a tax levied by the state on the total amount of a company’s annual gross sales.
Transaction tax states
In states that impose a transaction tax, such as Colorado, Florida, Georgia, and Illinois, the responsibility for paying the sales tax falls on both the buyer and the seller. However, although it is against the law for the seller to absorb the tax in Colorado, this practice is permitted in Georgia.
What is the Difference Between Local and State Sales Tax Filing?
Sales taxes at state and local levels generate income for their respective governments. Sales taxes at the local level are set by city councils, while the legislatures of respective states set state and federal taxes. The total sales tax paid by a consumer in a state where it is required to be collected the sum of the state sales tax and any additional municipal rates that may apply.
Monthly Sales Tax Due Dates
| Period | Due Date | Late After |
|---|---|---|
| January | February 1 | February 19 |
| February | March 1 | March 19 |
| March | April 1 | April 19 |
| April | May 1 | May 19 |
| May | June 1 | June 19 |
| June | July 1 | July 19 |
| July | August 1 | August 19 |
| August | September 1 | September 19 |
| September | October 1 | October 19 |
| October | November 1 | November 19 |
| November | December 1 | December 19 |
| December | January 1 (following year) | January 19 (following year) |
Quarterly Sales Tax Due Dates
| Period | Due Date | Late After |
|---|---|---|
| January – March (Q1) | April 1 | April 19 |
| April – June (Q2) | July 1 | July 19 |
| July – September (Q3) | October 1 | October 19 |
| October – December (Q4) | January 1 (following year) | January 19 (following year) |
Semiannual Sales Tax Due Dates
| Period | Due Date | Late After |
|---|---|---|
| January – June | July 1 | July 19 |
| July – December | January 1 (following year) | January 19 (following year) |
Annual Sales Tax Due Dates
| Period | Due Date | Late After |
|---|---|---|
| January – December | January 1 (following year) | January 19 (following year) |
