Business

How to file sales tax if you’re selling on multiple platforms

File sales tax

Our guide on how to file sales tax if you’re selling on multiple platforms covers the factors you should consider even before setting up your business.

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When you start your business, you might begin selling on multiple platforms. You have sales figures from different companies or websites, and you must understand how to generate a sales tax payment when working with these platforms. There are a few steps to follow to file sales tax when you have questions about sales taxes, and you must understand how to collect and pay these taxes before you open your business.

What Is Your Local Sales Tax?

Your sales tax filing should include state, county, or city taxes that you are required to charge. Before your company opens, you need to know the standard taxes you will charge if customers walk through the door. For example, the state charges 5%, your county charges 1%, and your township charges 1%. You will add a total of 7% to every invoice, and you should move that money to an account that allows you to protect that money.

However, you are not required to charge sales taxes on all websites. Some sites are exempt, some sites only ask you to charge the state sales tax, and others will use location data so that you can charge the specific amount of tax for each transaction. You need to know what you are getting into before you start selling.

Are You Charging State Or Local Sales Taxes?

As you begin selling, you must know if you are required to charge the local sales tax, state sales tax, or county tax. You may not know which tax applies because a massive site might have an agreement with your state that allows you to charge state sales tax only. However, your county or city may have passed statutes that require you to charge local and state sales taxes. Make sure that you know which taxes to charge before you begin.

How Do You Collect Information From Every Platform?

When you are selling on many platforms, you need accounting software that can help you collect all that information To file sales tax. Your sales are typically handled via an online payment system. The transaction record for these platforms can be pulled by an accounting program, and you can see how much tax has been charged.

When your accounting program has all this information, it can tell you how much sales tax is to be paid. You can generate a sales tax filing using this information, and you can send the money to the appropriate agencies. While you are selling on multiple platforms, you are one entity or business. This means that you should collect all your information and submit one payment for sales taxes. If you are sending many small payments because you sell on so many platforms, the state, city, or county will be confused.

Does The Platform Sell Exempt Items?

When you collect your sales tax information, you need to know if you are selling exempt items. If the platform allows you to sell exempt items, you need to tell the platform that these items are exempt. If you do not do so, the platform will likely charge sales tax as normal. This can be a bit of an issue because you are charging your customers too much money.

You may have transactions that include exempt and taxable items. When this is the case, every receipt should calculate the proper amount of tax for each sale. You need to see a subtotal before tax, and you must see the total tax amount. You can easily see if the sales tax has been calculated properly.

Pay Your Taxes Every Month Or Every Quarter

If you pay your taxes every month, you can pay on the first of the month for the month prior. This is a simple way to keep track of your tax payments When you file sales tax. At the same time, your tax payments can be made every quarter. If you are paying your taxes every quarter, you will make a lump-sum payment for three months. Collect all the information from each platform, calculate a total tax payment, and send one check or transfer.

You must also consider what the local or state government wants. You might ask each office what the requirements are, and you can schedule your payments accordingly. For example, your city tax office might expect payments every month, but your state tax commissioner allows you to make payments every three months.

Use Accounting Software?

When you use accounting software, you should make sure that your accounting software automatically collects information from each platform. You can use these programs to connect to the platforms automatically, and that information is stored in the program. You can build a spreadsheet just for your sales taxes, and you can see how much you have charged in sales tax.

You can even use this software to send the sales tax money to an escrow account so that it is not touched. This is a safe way to manage your money, and you do not need to worry about accidentally spending that money before taxes are due. Accounting software can also print reports for the month, quarter, or year. You can check trends for each platform, and you can even compare exempt and taxable items.

You Can Collect Your Sales Tax With Ease

You can collect your sales taxes with ease if you are using an accounting program that helps you handle information from multiple platforms. These platforms often ask you to charge to sales tax, but you might charge a different percentage in different places. The software can help you keep track of your sales taxes, and you can even transfer your money to an escrow account before it is paid. Some people try to handle sales taxes manually or do not charge the appropriate amount of sales tax on each platform. Avoid issues by understanding your responsibilities and using software for the calculations. If you have any questions, reach out to your local tax commissioner for more information.