Please note: This blog was originally published in 2020. It’s since been updated for accuracy and comprehensiveness.
If you file sales tax in more than one state, chances are you’ve wondered: why do I file on different days of the month and at different frequencies in different states?
For example, your home state might require that you file sales tax monthly on the 20th of the month, while another state where you have sales tax nexus might require that you file sales tax every quarter on the final day of the month.
Why do sales tax filing frequencies vary so widely?
In the US every state makes their own sales tax rules and laws and those rules and laws can vary widely. In fact, sales tax rules vary so much from state to state that four states don’t even have a sales tax at all.
Because each state is allowed to administer sales tax however they prefer, you’ll often find that each one has adapted the sales tax system to their own quirks and foibles. Most state sales tax filing due dates also correlate with other tax filing due dates, such as the monthly payroll tax deadline for employers.
But sales tax filing due dates aren’t all willy nilly. They do follow some patterns. A great majority of states require that taxpayers file on the 20th day of the month after the taxable period ends. Another large number of states require sales taxpayers to file by the last day of the month following the taxable period. But some states are outliers and require sales taxpayers to file by the 15th or 23rd.
Let’s say you file sales tax in three states and your sales tax is always due the 20th of the month after the filing period. It’s easy to get complacent and think that sales tax is always due on the 20th of the month. …Until you get to Maine where your sales tax return is due on the 15th. Paying Maine on the 20th like your other states can mean penalties and interest.
The key thing to remember here is don’t expect any one state to follow the sales tax filing rules of another state.
Frequent frequencies: monthly, quarterly or annually
But knowing the day of the month your sales tax filing is due is just the beginning. Every state also has a handful of different filing frequencies.
These filing frequencies are usually either monthly, quarterly or annually. (But some states have other frequencies — more about that below.)
States generally assign filing frequency based on one of two criteria:
- how much your business grosses in sales
- how much sales tax your business collects
For example, businesses with an average monthly tax liability of $100.01 to $1416.65 are required to file their California sales tax returns quarterly. Other states like Pennsylvania calculate how often a seller should pay based on their previous year’s third-quarter sales tax liability.
A handful of states, like Nevada and New York, base how often you’ll be asked to file sales tax on your average monthly taxable sales. For instance, in Nevada businesses who gross an average of $10,000.01 and up are asked to file monthly, while businesses who gross an average of $10,000 or less in taxable sales are assigned to file quarterly.
In many states, small or seasonal businesses are only required to file sales tax once per year.
The general rule of thumb here is that the more your business grosses, the more often a state will require that you file and pay sales tax.
Less common sales tax filing frequencies
While most states stick to the monthly, quarterly or annual cadence of sales tax remittance, some have gotten creative.
Some states require some taxpayers to pay semiannually, or twice per year. Others, like California, require certain high grossing taxpayers to file quarterly but to actually pay their sales tax due monthly.
A handful of others have put “accelerated sales tax payment programs” in place to require that very large companies pay sales tax within just a few days of when it was collected, often sellers will have a monthly filing frequency and be required to make advanced sales tax payments.
For example, most states have a threshold where a business that collects above a certain amount in sales tax is required to file sales tax monthly. Historically, monthly was the most common sales tax filing frequency for high volume businesses. But accelerated programs allow states to require sales tax remittance from retailers even more frequently. They may require twice monthly payments, or an additional payment mid-year.
In addition, there are certain scenarios when a business will file quarterly, but make monthly sales tax prepayments.
The bad news is that when your e-commerce business grows you will often find yourself filing sales tax returns in different states and filing at many different frequencies and days of the month.
The good news is that TaxJar has your back.
File on time, every time with TaxJar
The bad news is that when your e-commerce business grows you will often find yourself filing sales tax returns in different states and filing at many different frequencies and days of the month.
The good news is that TaxJar has your back.
AutoFile your sales tax returns
With TaxJar AutoFile, TaxJar pulls in all of your sales data from all of your online shopping carts and marketplaces, creates returns in the format in which each state wants to see them, and then automatically files your sales tax returns on time, every time.
This means no more color coding your calendar to remember to pay Maine by the 15th of every quarter, Ohio by the 23rd of every month, and five more states by the 20th of every quarter. (Oh, and did we mention that New York has decided to operate on a different quarter system than everyone else? Of course they did! Q1 in New York runs from March to May.)
AutoFile requires just a one time enrollment. After that, you can forget about sales tax filing and get back to running your e-commerce business.
See your sales tax filing deadlines on your dashboard
Don’t want to AutoFile? TaxJar can still help.
When you add a new state to your TaxJar dashboard, your filing frequency defaults to monthly. But you can easily change that by following these steps:
- Navigate to your Dashboard, and look for the ‘wrench icon’ underneath the state with the incorrect frequency
- On the next screen, you can select “Payment Schedule” and choose the proper frequency from there
- Once you “Save Information” your Dashboard will reflect the correct filing frequency and your reminder emails will be updated for the upcoming months.
Your TaxJar dashboard will remind you of your upcoming sales tax filing due dates so you can avoid those pesky penalties and interest charges that result from failing to file on time.
Ready to automate sales tax? To learn more about TaxJar and get started, visit TaxJar.com.
