Filing Sales Tax Process Template

Our Sales Tax Procedure

Why We Tax Our Customers

Our business is required to file sales tax because we sell goods/services that are subject to sales tax in our state and locality.

We have registered with the state tax agency and established a tax rate accordingly. The appropriate sales tax is automatically added to the sales price of our goods and services and collected from the customer.

How to File Sales Tax

Here's how to file sales tax for customer payments.

1. Record sales tax collected: Record the sales tax collected from each sale in a sales tax recordkeeping system. This system should include the date of the sale, the amount of sales tax collected, and the name of the customer.
2. File sales tax returns: The business is required to file sales tax returns on a regular basis, typically monthly, quarterly, or annually. The sales tax return should include the total amount of sales tax collected during the period, as well as any applicable exemptions or deductions.
3. Pay sales tax to the state: Once the sales tax return has been filed, the business should pay the sales tax collected to the state tax agency. This payment can typically be made electronically or by mail.
4. Keep records: It is important for the business to keep records of all sales tax collected and paid for a minimum of three years. These records may be required for audit purposes and should be readily accessible if needed.

Applicable Penalties

If we don't file sales tax properly, our company could face a number of consequences. These may include the following:

• Penalties: We may be required to pay penalties for failing to file our sales tax returns or for submitting them late. These penalties can add up quickly and can be substantial.
• Interest: In addition to penalties, we may also be charged interest on any unpaid sales tax. This can significantly increase the amount that we owe.
• Legal action: If we fail to file our sales tax returns or pay the required tax, the government may take legal action against us to recover the funds. This could include garnishing our wages or seizing our assets.
• Loss of our sales tax permit: If we consistently fail to file our sales tax returns or pay the required tax, we could lose our sales tax permit. This would prevent us from doing business until the issue is resolved.

It's important to take sales tax filing requirements seriously and to ensure that we are complying with all applicable laws and regulations.