To retailers, their accountants and tax professionals. . .Having difficulty in navigating the complex world of sales tax compliance?
Let us help.
Taxcompliant.net processes your sales transaction data and produces reports which simplify your preparation of state sales/use tax returns. Regardless of how you collect sales tax, whether it is from an e-commerce application, an e-commerce service provider, or if it is from invoices generated through your in-house accounting, we can help with the burden of preparing and filing your state tax returns.
It’s a complicated process. There are 45 states having sales/use tax requirements. Within those states, some local counties, cities and special districts impose sales/use tax. In total, there are about 12,000 tax jurisdictions in the United States and sales/use tax collected in each of these jurisdictions must be appropriately reported by jurisdiction to the states. Adding to the complexity are the various rules about which tax rates apply for sales transacted in these jurisdictions—these are the nexus or sourcing rules referring to sales location, exemptions, etc. which are briefly described in the Nexus and Sourcing tab of this web site (this is provided for information only, Taxcompliant does not provide advice or support to retailers when determining which of these rules apply to their particular circumstance).
The retailer can collect sales tax either by subscribing to an e-commerce service provider, using a specific e-commerce application, or by manually entering rate information into their accounting system, eg. Quickbooks. For those manually entering data they may use the Taxcompliant Look-Up (on this page) or Look-Ups available from some states or Look-Ups provided by e-commerce service providers. (The Taxcompliant ap may be especially useful for individuals providing service at remote locations where invoices are generated on-the-spot.) Whichever application is used, the retailer must file their sales/use tax returns appropriately to the states. And this is where Taxcompliant.net can help.
Methods used to collect sales/use tax generally provide sales activity reports to the retailer. These reports can be downloaded as Excel or Text (csv) files. Data downloaded must include the State, Zip Code, Taxable Amount, Tax Rate, and Tax Amounts for each sales transaction. These files are shared with Taxcompliant.net via the Dropbox (which is really easy to use). Taxcompliant then matches these transactions to the appropriate tax jurisdictions and generates sales tax reports for each state where taxes are collected. These reports are then shared back to the retailer via the Dropbox. Filing returns now is greatly simplified, since the tax data is consolidated by jurisdiction and can be easily reported by electronic filing (which most states recommend) or by paper form.
To better understand the process, we have generated an example using our Quickbooks application. In this example, we generated a few sales transactions for each state, created a custom report in Quickbooks, then downloaded the report as a text (csv) file. We processed that file to produce sales/use tax reports for each state where those transactions took place. Please have a look at the example in the Quickbooks Application tab and, of course, contact us if you have questions.
Finally, we can’t over emphasize the role of professional accountants and tax professionals in maintaining tax compliance for all 45 states. A discussion of these issues, and how TaxCompliant.net may help is contained in the Why TaxCompliant? Tab of this web site.