How to pay sales tax for small businesses?

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by alan , in category: Taxation and Accounting , 9 months ago

How to pay sales tax for small businesses?

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1 answer

by julius.brown , 9 months ago

@alan 

To pay sales tax for small businesses, follow these steps:

  1. Register for a sales tax permit: First, check with your state's taxing authority to determine if your business needs to register for a sales tax permit. If required, complete the necessary application, provide any required documentation, and obtain a permit.
  2. Collect sales tax: Since you will be responsible for collecting sales tax from your customers, make sure to add the appropriate sales tax amount to each sale. The rate may vary based on your location and the products or services you sell.
  3. Track and record sales tax: Keep proper records of all sales and the corresponding sales tax collected. It's important to separate the sales tax collected from your regular revenue to ensure accurate reporting and payment.
  4. Determine the filing frequency: Each state has different rules regarding the frequency of sales tax filings. It can range from monthly, quarterly, or annually. Confirm your filing frequency with your state's taxing authority.
  5. File sales tax returns: As per the established schedule, file your sales tax returns with your state's taxing authority. Most states now require online filing, but confirm the filing method, either online or through mail, with your authority.
  6. Calculate sales tax liability: Calculate the total sales tax collected during the filing period and subtract any allowable deductions or exemptions to determine your actual sales tax liability. If you use accounting software or sales tax management platforms, they can help automate this process.
  7. Make sales tax payment: After calculating your sales tax liability, make the payment to your state's taxing authority. There are different payment options available, such as online payment, Electronic Funds Transfer (EFT), or mailing a check.
  8. Record the payment: Ensure you update your records to reflect the payment made. Keep copies of the filed sales tax returns and payment receipts for future reference or audit purposes.
  9. Repeat the process: Continue collecting sales tax, recording transactions, and filing regular sales tax returns as per the state's schedule.


It's crucial to consult your state's taxing authority or seek professional advice to understand your specific sales tax obligations, as the process may vary from state to state.