One question we’re semi-frequently asked in Support is “Why can’t I file and pay my sales tax anytime I want?”
We heard this a lot during the recent April sales tax “perfect storm.” Income tax day for sole-proprietors was April 15th, then many states had quarterly sales tax filing due dates during the last 10 days of April. Way to add insult to an already taxing injury!
But the truth is that the states aren’t likely trying to make you hate the month of April.
In general, states merely assign taxpayers a sales tax filing frequency based on your sales volume and, therefore, the amount of sales tax they expect you to remit.
Let’s look at an example of what a seller might face:
Stacy lives in Wisconsin and has been filing sales tax there for a few years. She collects approximately $3,000 in sales tax in a year from customers in Wisconsin. Wisconsin generally requires that customers who collect between $601 and $4800 per year to file sales tax quarterly. So Stacy finds herself filing and remitting sales tax in Wisconsin quarterly.
But then Stacy begins selling on FBA and finds that she has sales tax nexus in Virginia. She files for a sales tax permit in Virginia and, for her first year, they assign her a sales tax filing frequency of monthly.
Stacy doesn’t make many sales in Virginia, though, and she actually collects on about $200 in sales tax from customers in Virginia per year. So after that first year, Virginia assigns her a filing frequency of annually.
In the end, it turns out that Stacy files sales tax in Wisconsin every quarter and Virginia annually. Unfortunately, this means Stacy has to keep up with multiple filing due dates and sales tax reports.
Some States DO Let You Change Filing Frequency
As you can see from the Virginia example above, some states actually change your sales tax filing frequency. Many states put new merchants on a monthly filing frequency at first, until they can establish how much you’ll actually be remitting in sales tax.
You can also ask. The Arizona Department of Revenue will generally assign you a monthly filing frequency at first, but you can contact them and ask to pay less often.
Setting Your Sales Tax Filing Frequency in TaxJar
So the bad news is that you can’t always control when you file and remit sales tax. The good news is that TaxJar can make this simple.
Update your sales tax filing frequency in TaxJar and you’ll see your sales tax due dates on your TaxJar dashboard.
1. Login to TaxJar and click “Account” on your dashboard
2. Click “State Settings”
3. Check out the filing frequency we have set for each of your states. If you see a state that looks incorrect, just click “change” next to the state.
4. In the “Payment Schedule” field, choose your filing frequency
From there, TaxJar will show you your sales tax filing due dates on your TaxJar dashboard. All you have to do is login and you’ll see your next sales tax due date.
Do you have questions about sales tax filing frequency? Have you successfully gotten your sales tax filing frequency changed with a state? How did you do it?