If your business is registered with your local tax authority and you have collected sales tax to meet your state regulations, you must report your sales and send a report on a regular basis. Some states allow small businesses to send in the reports annually, semi-annually or quarterly. Most states require monthly filing and paying of sales tax reports.
Things You'll Need
- State tax ID number
- Gross receipts for reporting period, usually by location
- State tax report form
Calculate your gross receipts. If the taxes are already included in your gross receipts, you will need to deduct them for your report; otherwise, you will be paying taxes on the taxes. You need to calculate taxes for each of your business locations, as many locations have different sales tax percentages. This is due to some cities charging an additional sales tax. For most states, you report and pay all taxes to one central authority, usually at the state level. Check your local and state laws for information on your specific area.
To calculate gross receipts, take the full sales amount and divide it by 1 plus your local tax rate. For example, if your sales tax rate is 7.5% and you had sales of $359.00, you would divide 359.00 by 1.075. This gives you gross receipts of $333.95. Repeat the calculations for each location of business.
Fill out the state sales tax report form. Most forms are self explanatory with areas for your tax ID number, your locations and your gross receipts. In the gross receipts area, report the amount you calculated. In our example, the amount would be $333.95. Now multiply by the tax rate for the location. In our example, it was 7.5% which would equal $25.05 sales tax. Repeat for each location and total at the bottom of the form.
File your report with any funds due to the proper authority. Many states have options for filing the state tax report online and paying by debit or bank transfer. This option can assist you in completing the report in a timely manner.
Tips & Warnings
- Keep copies of all reports you file as well as documentation of any payments sent.
- Be sure to include the dates the report covers on the form.
- Some states also have areas for reporting other items like state income tax withheld. Report those figures in their proper areas and total the tax due.
- File your state sales tax reports on time. Otherwise, penalties and interest can accrue, even if you had no sales during the previous reporting period.
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