Whether you file state returns every month, quarter, or year, nearly every online seller will have a sales tax deadline in January. Keep in mind that, in most states, January sales tax is usually due by January 20th. Around TaxJar, we call January the “Sales Tax Perfect Storm” and everyone is invited.
To prepare, here’s a quick refresher of the steps to get ready to file:
Find your sales tax filing due dates. Here is a list where you can check when January sales tax is due in your state.
Report your owed sales tax for each state where you have sales tax nexus. If you have a “significant” presence in a state you will have nexus there, and will then be required to file sales tax returns for that state. You’ll always have nexus in your home state, but other business activities like remote workers, warehouses stocking your merchandise, or even selling at craft fairs may add additional nexus states. Here’s a guide to determining if you have nexus in a given state.
File your sales tax returns. Once you’ve figured out how much sales tax you’ve collected and where you’ve collected it, you’ve done the hard work–now it’s time to file your sales tax return! You’ll have a few options for filing:
- File online: You’ll need to find your state’s sales tax portal online, fill out its detailed form, and submit a payment through its payment system (which is usually a separate system from the portal).
- File by mail: This is the option that takes the longest and many states are even discontinuing the option to mail in your tax returns.
- AutoFle: With this option, TaxJar will file you sales tax returns for you in nearly every state. You don’t have to worry about reporting or completing forms–everything is done automatically. TaxJar AutoFile is even smart enough to figure out if your state has a little-known tax discount for filing on time, and if so will apply that discount for you automatically.
No matter which method you use to file your sales taxes, make sure you file for every state for which you’re registered even if you owe no sales tax for that filing period.
Prepare for Next Year’s Perfect Storm As you make your way through the year, keep track of any new states where you may have established nexus and make sure to register for permits in those states.The flip side of that is that you may find you no longer have sales tax nexus within a state. In that case, contact that state’s department of revenue and let them know so you can begin ending your business relationship with that state. Keep in mind that you may have “trailing nexus,” so make sure to check that state’s regulations about how long you must continue filing once your nexus has ended.
Once you’ve filed, you’re now done with January sales tax and can get back to your business. Dealing with sales tax is never fun, but when you have a solid system to automate the pain away it’s definitely less hassle, and leaves you more time to tackle your New Year’s Resolutions.
TaxJar is a service that makes sales tax collection, reporting and filing simple for more than 5,000 online sellers. Try a 30-day-free trial of TaxJar today and eliminate sales tax compliance headaches from your life!