Sales tax can be intimidating for entrepreneurs. Rules differ in each state, county and city, but some basics are universal.
WHAT’S TAXABLE
Generally, if you sell a tangible product, you’ll be required to collect sales tax from buyers. But some states also impose sales tax on services.
PERMIT REQUIRED
If you’re required to collect sales tax in your state, you’ll need a sales tax permit. Once you receive the permit, the state will assign to you a filing due date and frequency, which is generally determined by your annual revenue and can be monthly, quarterly, or annually. Keep in mind if your company operates in more than one state, you may need to apply for multiple state sales tax permits.
COLLECTION
Be sure to collect tax on all sales, regardless of the source. You’ll need to collect tax on sales in brick-and-mortar stores, online, or through Amazon’s marketplace. And in most states, even if you had no sales for a period, you’ll still need to file a sales tax report for the period or risk paying a fine or having your sales tax permit revoked.