Everything small businesses need to know about collecting, reporting, and filing sales and use taxes.
Don't skip this!
Many small business owners don't know they're required to collect and remit sales tax. Failure to file can result in penalties, interest, and even business license revocation.
Sales tax is a consumption tax charged on the sale of goods and certain services. As a business owner, you collect this tax from customers and remit it to your state (and sometimes local) government.
Use tax applies when you purchase taxable items for your business and the seller didn't charge sales tax (common with online purchases from out-of-state sellers). You owe use tax at the same rate as your local sales tax.
Monthly Filing
Businesses collecting >$300/month in sales tax
Due: 20th of the following month
Quarterly Filing
Businesses collecting $100–$300/month
Due: Last day of the month after quarter ends
Annually Filing
Businesses collecting <$100/month
Due: January 20th of the following year
Register for a sales tax permit with your state
Collect sales tax on taxable sales
Track all sales tax collected (Glo Invoice does this automatically)
File your return by the due date (monthly, quarterly, or annually)
Remit the collected tax to your state revenue department
Keep records for at least 4 years
Glo Invoice automatically tracks all tax collected on your invoices. Use the Reports page to generate monthly, quarterly, and annual tax summaries you can print and use for filing.
As a self-employed individual or business owner, you're responsible for paying estimated income taxes quarterly.
Use IRS Form 1040-ES for federal estimated taxes. Most states also require quarterly estimated payments.