Basics

How to Prevent a Sales Tax Filing Hangover

by Jennifer Dunn

Sales tax filing tips

Many, many states had sales tax filings due yesterday, October 20th. Yesterday evening I was chatting with an FBA seller who had waited until the last minute and told me, “I wish there were 48 hours in this day!” Luckily she was a TaxJar customer so it turned out her sales tax filings were quick and painless!

But that got me thinking about all of the other product sellers who are tearing their hair out during a “sales tax perfect storm” like October. How must they feel the next day after spending hours trying to figure out how much sales tax they collected from buyers in a state (especially if they have to check multiple sales channels!), dividing what they’ve collected up by county, city and other taxing districts, logging into each state, and making sure every field matched up perfectly? Probably not so good. Most likely a little beat up and headachy.

And who wants to feel like that on a perfectly good day?

To prevent this from ever happening to you again, I’ve put together some tips to avoid the dreaded “Sales Tax Filing Hangover” next time!

How to Prevent a Sales Tax Filing Headache

1.) Make Sure You’re Set up to Collect Sales Tax Correctly – Some of the biggest sales tax filing headaches arise when you’ve collected an incorrect amount of sales tax. Avoid this issue by making sure you’ve set up sales tax collection correctly in each shopping cart on which you sell. We have guides to setting up sales tax collection on some of the most common eCommerce platforms here.

2.) Sign Up for a TaxJar Account – This is TaxJar’s blog so of course I’m going to say that, but it’s true. If you want to avoid sales tax hassle, sign up to TaxJar and connect all the shopping carts you sell on (including Amazon FBA or MF, PayPal, eBay, Shopify, Bigcommerce, WooCommerce, Magento, Square and more.) When it comes time to file, TaxJar provides you with a return-ready report to make sales tax filing a snap in every state.

3.) Set Your Nexus States in TaxJar – You should register for a sales tax permit and collect sales tax in states where you have “sales tax nexus.” To make the most of TaxJar, make sure you’ve added all the states where you have nexus to your dashboard. Here’s instructions on how to add or remove states from your TaxJar dashboard.

4.) Set Sales Tax Filing Frequency in TaxJar – TaxJar will tell you how much sales tax you have collected by taxable period. This is usually monthly, quarterly, or annually. Make sure when you set up each state on your TaxJar dashboard you also tell us your correct filing frequency. What happens if you don’t do this? If you tell us you file monthly when you are really trying to file a quarterly sales tax return you won’t see all of your taxes collected and your sales tax filing will be incorrect. Remember, each state determines how often you file!

5.) AutoFile Your Sales Tax Returns – To really make your life simple, AutoFile your sales tax returns with TaxJar. After you have enrolled in AutoFile, given us some key info, and your enrollment has been accepted, all you have to do at tax time is let TaxJar file your sales tax returns for you. You can really say goodbye to the hassles of sales tax! TaxJar AutoFiles sales tax returns in every state. The service is an additional fee per state per filing.

6.) But if You Don’t AutoFile, Get Started Early! – Nothing creates stress quite like waiting until the very last minute, so if you don’t elect to AutoFile, start early! We recommend that you start around the 3rd or 4th of the month to give all of your transactions a chance to flow through your shopping cart or payment processor. This gives you time to troubleshoot should an issue arise.

For more about quickly and easily filing your sales tax returns, check out this video guide from TaxJar;

I hope these tips have helped you avoid a sales tax hangover after future sales tax filing deadlines! Have questions? Start the conversation in the comments!

Comments are closed.
Start your 30 day free trial of TaxJar.
No credit card required.