Had To Start from Scratch but Here I go

Thursday, November 14, 2019

What is Sales Tax and Sales Tax Compliance

What is Sales Tax? Dictionary term a tax on sales or on the receipts from sales.

Ok so this is pretty straightforward and everyone of us should know of or are already paying for sales tax on just about everything. I personally think it's way too high, like I don't pay enough for food or clothing as it is and than to be taxed which I no idea where any of that money even goes kind of bothers me.

However its unavoidable and we need to shop and buy gas or even go to get our pets taken care of.  If you are not aware of sales tax and the sales tax act you can find it on the receipt after you purchase something in the USA, I am not sure about other countries.

Next let's focus on sale tax compliance, I didn't know the exact terms or what it entailed specifically because sales tax compliance was just not a term I came across in life yet, I know that's odd and I might have like heard about it at some point but it just like left my mind, which is a great thing because we can learn about it together. As always I love Google and get so much information from even the quickest search. I would recommend hiring a professional if you are not sure about this and the proper forms because wayfair sales tax exemption it does not look easy.

So I checked Google and found this from the Sales Tax Institute (credited)

What is Sales Tax Compliance and How Do I Do It?

At the Sales Tax Institute, we are frequently asked about “how to do sales tax.” In other words, how does one stay sales tax compliant?

In short, sales tax compliance is preparing and filing sales and use tax returns. Once a taxpayer is registered to collect or pay sales and use taxes in a jurisdiction, returns must be filed and the tax must be remitted on a timely basis.

Sales tax compliance can be viewed as an 8-step process.
1. Gather the Data
In order to properly complete a sales or use tax return, you’ll need to gather data from many different sources within the company.

2. Evaluate and Reconcile the Data
Gathering data from various departments can create challenges in evaluating and reconciling the data. The different reports and data must be consolidated for reporting.

3. Populate the Tax Return
Once you’ve gathered all the necessary data, you need to input the information into the tax forms. A review of the tax returns is necessary to understand what is required and how it is to be presented.

4. File the Tax Return & Pay Tax
Once you’ve prepared the return, it must be filed on a timely basis and the tax must be remitted to the taxing jurisdiction. The jurisdiction will inform you of your filing frequency and due date.

5. Reconcile Bank/Confirm Payments
Once you’ve submitted the tax payment, you should confirm that payment was received and processed by the state Department of Revenue. You should also prepare a bank reconciliation to confirm that payment clears for the proper amount.

6. Calendar Update
It is a best practice to create a “Tax Calendar” spreadsheet for tracking important filing information such as due dates, the tax due, who prepared the return, the filing method, date filed, the filing and payment confirmation numbers and more.

7. Respond to Notices
Notices are generated by taxing authorities when errors occur. Many notices have short response times associated with them and require prompt attention.

8. Repeat!
Again a special thank you to the Sales Tax institute for the help and excellent tips.

This is a sponsored post.

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