If you sell your products or services across state lines, then you are surely familiar with the challenge of paying out-of-state sales tax. This process can be extremely confusing and time-consuming, since each state differs on which items are subject to sales tax, and what the tax rate for each area might be. Complicating the issue even further is the fact that some states also have local taxes that depend on the county where the sale takes place or where the delivery occurs.
To ensure that you remain compliant with all sales taxes, it’s a good idea to consider working with a tax professional who can ensure that you haven’t missed anything. If you don’t have someone on staff who can take care of this responsibility, you might consider working with an outsourced tax management service that can keep your business compliant with all out-of-state sales tax regulations.
Check out these advantages of outsourcing your tax management services as you determine whether this might be the right move for your business.
Understanding of State, Local and District Taxes
An outsourced tax management professional can stay on top of all state, local, county and district taxes so you won’t have to keep calculating those on your own. In addition, if those tax rates change (either up or down), the outsourced tax professional will alert you immediately and help you change your processes so you’ll be compliant with the rules.
Knowledge of Local Tax Nuances
Are your systems configured to charge state taxes on a customer’s entire payment? If so, you could be collecting too much. In most cases, tax does not apply to delivery costs, as long as you’re only charging for the actual cost of delivery. An outsourced tax professional can help you catch and mitigate this issue to make sure your tax collection practices are more accurate.
Understanding of Exemptions
Not everything you sell or resell is subject to state sales tax, but it’s challenging for any entrepreneur to keep track of what’s taxable and what isn’t. An outsourced tax management service is able to navigate the taxable and non-taxable products and services so you don’t under- or overcharge your sales taxes to customers and clients.
Depending on your sales volume, you may have to pay your state sales taxes on a monthly basis, but this can depend on how much you sell and where you’re located. If you do business across multiple states, following up on this requirement can become even more complicated. That’s another area where an outsourced tax management service can come in handy. They can follow the requirements for each locality and ensure that you meet all timely filing regulations.