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Product Sellers: How to Decide When It’s Time to Automate Sales Tax

This post was written by TaxJar and is for informational purposes only. Seek a tax expert for your specific needs.

As a business owner, the more you can take the nonprofitable, administrative hassles off your plate, the better. One hassle better outsourced sooner rather than later is sales tax.

You collect sales tax from your buyers and pay it back to the state. Unlike sourcing a new product or striking a deal with a new distribution partner, handling sales tax filing doesn’t build your brand or do a thing for your bottom line.

Here are a few reasons you might want to think about sales tax automation.

You need to buy back your time.

When your business is brand new, you likely have more time on your hands than money. It’s often necessary to take care of all aspects of your business yourself. But as your business grows, how you, as the business owner, allocate your time becomes all the more essential.

Think of it this way. As the visionary behind the business, your time is limited and valuable. Would you pay someone who isn’t an expert and doesn’t really want to do a job a CEO’s salary to do it? Because that’s essentially what you’re doing if you, the business owner, are spending your valuable time on sales tax.

You need to focus on the big picture.

Handling sales tax can be a painstakingly detailed exercise. One that can get in the way of your business’s big picture — growth.

To successfully file a sales tax return, you are required to determine the county, city, and special taxing jurisdiction of each sale you made. This is fairly simple if you own a brick-and-mortar store and stay in one spot, but a lot more difficult if your business is mobile or you sell online to buyers all around your state.

Also, you only file one sales tax return for your business. So, if you make sales through multiple channels, you need to combine all your sales tax reports before filing.

From there you must carefully enter numbers into your sales tax filing. Missing a little box or transposing a number means a big red “error” when you go to hit submit, and then you have to go back and figure out what went wrong. Oh, and did we mention that most states want you to round each field up or down? That makes it even more difficult to try to figure out at a glance where you went wrong.

Your calendar is out of control.

As a business owner, every day brings a new opportunity to pencil into your already jam-packed calendar.

And then there are sales tax filing due dates. States generally require retailers to file sales tax either monthly, quarterly, or annually. In general, the higher your sales volume, the more often you file a sales tax return.

But that’s just the beginning. If you are required to file sales tax in more than one state, you must watch out for variable due dates. The majority of states have sales tax due on the 20th of the month following the taxable period. However, many states want to hear from you on the last day of the month. If you have to deal with multiple states and filing frequencies, you may find sales tax due every month on the 20th, once per quarter on the 15th, and then once per year on the 20th.

You just don’t want to deal with sales tax.

You surely didn’t strike out on your own just to spend your days bogged down by administrative hassles. Don’t like filing sales tax? Don’t want to see another sales tax return ever again? Nobody can blame you. If you simply never want to handle sales tax again, then automate it and get it out of your hair.

As your business grows, it’s important to pick and choose where you spend your time. Click here to learn more about sales tax automation so you can get back to doing what you do best — growing your business.

About TaxJar
TaxJar is a service that makes sales tax reporting and filing simple for more than 8,000 online sellers. Try a 30-day-free trial of TaxJar today and eliminate sales tax compliance headaches from your life.