Imagine a store owner who has just completed a transaction. For every transaction, sales tax has been collected. This is the tax imposed on the sale of goods and services and is usually a percentage of the purchase price. For Kansas the state rate is 6.5% while Missouri’s rate is 4.23%. This collection must be reported somewhere. Sales tax returns specify the tax your company is required to pay on the sale of products and services across jurisdictions. Sales tax is collected from each purchase transaction and is later filed by the company to the appropriate governing authorities. It establishes credibility and transparency of the company as documents are validated by auditors, provides documentation of your company’s financial performance, and establishes internal processes for collecting sales tax from customers and reporting it to authorities.
Filing frequency is based on the amount of tax liability incurred during the preceding calendar year. Businesses whose annual tax liability is $0 - $1000 will file annually with a due date of January 25th of the following year. Those with an annual tax liability of $1000.01 - $5,000 will file quarterly with a due date of the 25th of the month following each quarter (ex: April 25, July 25, October 25, and January 25). Monthly filings are for those businesses with an annual tax liability of $5,000.01 and over and the due date is the 25th of the following month. Seasonal businesses will file monthly during business operations. Tax Obligations very across jurisdictions. Failure to file on time can result in penalties, interest, and litigations. All businesses must file even if there are no taxable sales. In these cases, a zero return must be filed. Although it is possible to paper file, most states prefer on-line filing. Check with your state tax agency on the best preferred way to file.
If you have any questions about the topics listed above, or if you would like to schedule an appointment, please do not hesitate to contact our team. Appointments can be scheduled online by visiting our homepage at www.ongandcompany.com.