Avoiding Audits | Filing and Remitting Payment On Time
When managing sales tax for your small business, it can feel like you need to keep track of a million, tiny details. One of the most important details on this list is sales tax deadlines. It’s not enough to simply know where you have nexus and collect and remit sales tax. Those taxes also need to be filed and paid on time in order to avoid fines and penalties.
Why Sales Tax Deadlines Can Be Tricky
Sales tax filing deadlines can be a little complicated. This is especially the case when you have nexus in multiple states, as each state has its own deadlines. Additionally, both sales tax deadlines and the frequency of how often you charge sales tax in each state can vary based on your revenue.
For example, in Colorado, if your e-commerce business makes less than $300 per month, sales tax must be filed quarterly (on April 20th, July 20th, October 20th, and January 20th). If your business makes more than $300 per month, they must be filed monthly on the 20th day of the month following the reporting period.
That’s a whole lot to keep track of, and that’s only one state. As your business and customer base expand into multiple states, tracking all of these deadlines, filing the correct paperwork, and making payments on time can become much more complex.
Why You Can’t Miss Filing or Payment Deadlines
Missing sales tax deadlines costs your business a lot of money. The penalties for late payments on sales tax can be steep, and they kick in very quickly after the payment deadline. In Connecticut, for example, you are charged a 10% penalty for sales tax payments that are more than fifteen days late. Missed payments can also trigger an audit, as it is a quick way to generate negative attention from the state.
What Can I Do?
At a bare minimum, you should have a spreadsheet tracking the various sales tax filing and payment deadlines your business has. This will require research and maintenance, both up-front and on an ongoing basis, since states can change their deadlines.
To make things exponentially easier on yourself, Taxify can automate this entire process. Taxify has a team of tax professionals (lawyers, researchers, and accountants) who are there to ensure correct rates and correct filing dates for your business. Combine that tax content with Taxify’s automated filing and remittance, and enjoy effortless sales tax compliance. We would love to show you how easy your sales taxes could be, simply schedule a demo or try Taxify free for 30 days.
Have some more questions? Let us know! We’re happy to help, and we love talking taxes.
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