1) Register correctly in with each jurisdiction in which you do business. There are over 7000 of these jurisdictions ranging from state to county, city and locality. Keeping receipts showing tax collected is simply not enough.

2) Keep up with changes in the tax code and know the regulations for each state to ensure that you are filing sales tax returns correctly.  You can check each state’s division of taxation or department of revenue to find filing frequency, tax rates, and for answers to compliance questions.

3) Rely on specialized software to collect sales tax for shipments to each of your locations and/or your customers in all 50 states.  Each time a non-exempt transfer of assets is made, tax is due in the state and locality to which the items are shipped.  This does not sound complicated; however, with each item subject to its own requirements by jurisdiction, actual implementation turns out to be quite complex.  Tax software can help avoid errors, but will cost in the range of 8 to 10 thousand dollars.

4) File sales tax online where this option is available.  Not only is online payment more secure than sending checks in the mail, but you also receive immediate confirmation to keep for your records.  Filing sales tax online is not always smooth sailing, as tax websites tend to be counter-intuitive with poor navigation and confusing forms.

5) Seek professional help if you have any doubt about the accuracy of your returns.  It is worth the extra attention to avoid unnecessary complications if you are audited in the future.  For example, incorrectly assigned jurisdiction codes can cause sales tax to be accrued at a lower rate, exposing your company to liability and penalties.  Similarly, overpayments will divert funds which could be used elsewhere.

I can assist you with national sales tax compliance, from accruing sales tax on your orders to filing accurate returns in all 50 states, eliminating the need for you to register or purchase expensive software.  Free yourself up to manage your company and allow me to shoulder the burden of keeping up with tax changes, collecting the correct amount of tax, and dealing with all those returns.

Matt Coombes is a Business Consultant living in Nashville, TN.
Website: www.myfsi.net
Blog: www.earlytone.blogspot.com

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