Collecting, reporting and filing sales tax returns is one of those hassles that every product seller faces. To add insult to injury, as your business grows, your sales tax life grows more complicated. If you find yourself dreading sales tax filing time, this post will help you decide if it’s time to automate your eCommerce business’s sales tax.
Do any of these sound like you?
You can’t find enough hours in the day
Small business owners are required to become jacks of all trades. This means not only knowing your products backward and forward, but doing everything from hiring personnel to making sure there’s enough coffee in the pot to fuel your day.
Your time is limited and valuable. As you grow more successful, it’s important that you spend time directly on the things you can do to make your business grow. And, unfortunately, sales tax isn’t one of those things. Sales tax will never increase your profits. It’s merely and administrative hassle. So, if you find yourself spending hours on sales tax collection, reporting and filing sales tax when you could be doing something that will boost your business bottom line, it may be time to automate sales tax.
You’re a visionary, not a details person
When you started your business, you likely had a grand plan for how you wanted the venture to turn out. Maybe you wanted to do something as grand as change the entire world, or something more modest but equally powerful, like provide a college education for your children. Either way, to get there you need to focus on the big picture.
That’s another reason why filing sales tax returns can be such a time and energy suck. Sales tax is all about details. Not only must you know how much sales tax you collected from buyers in each state, you must also break down those amounts by county, city and special taxing district. There’s nothing that takes your eyes off the prize like poring over a tax table and a map to try to determine which little box you fill out on your sales tax return. If the little details of sales tax are getting you down, do yourself a favor and automate.
You keep fighting with your state’s online sales tax system
States don’t make it easy to file sales tax. Not only do they require you to break down how much sales tax you collected by city, county and other special district, they require you to do things like sum numbers and round amounts up and down. As part of our research at TaxJar, we’ve watched many online sellers file their sales tax returns, and it’s amazing how often you will think you’ve filled everything out right only to find the state kick back a big red “error!” message.
When this happens, it means you have to double check your work and often fill out the whole sales tax return over again. Nobody has time for this! If this sounds like you, it may be time to automate your sales tax filing.
Your calendar is out of control
Unlike income tax due dates, sales tax due dates don’t follow any particular rhyme or reason. Many states want you to file your sales tax return by the 20th of the month after the taxable period, other want to hear from you on the 23rd or the 25th, or some other date.
Further, some want to hear from you monthly, some want to hear from you quarterly, and others want to hear from you annually, or semi-annually… and this all depends on your sales volume within the state.
Worse, no matter how complicated states make keeping track of sales tax due dates, they have no mercy when you’re late. Filing late means a penalty (usually around $50) and interest on the amount that you paid late. If you keep finding yourself filing late, it may be time to automate your sales tax filing.
You’re not taking your sales tax discounts
Did you know that over half the U.S. states with a sales tax offer a small discount to sellers for filing on time? This sales tax discount is generally 1-2% of the sales tax you collected. You get to keep it right in your pocket when you file a sales tax return, as long as you let the state know. Of course, as with anything sales tax related, states don’t make it easy. Calculating that math can be frustrating when all you’re trying to do is get your return filed. TaxJar is the only online filing solution that calculates that sales tax discount for you and makes sure you get to keep it. In fact, the discount actually pays the $19.95 cost of TaxJar AutoFile in many cases!
If any of the above sound like you, it may be time to consider putting your sales tax on autopilot. Do you have any questions or comments about automating your sales tax life? Start the conversation in the comments!
TaxJar is a service that makes sales tax reporting and filing simple for more than 9,000 online sellers. Try a 30-day-free trial of TaxJar today and eliminate sales tax compliance headaches from your life!