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Is There Sales Tax in Delaware?

Beyond Delaware Sales Tax: Other Taxes You Should Know

Corporate Income Tax

Franchise Tax

Corporations incorporated in Delaware, regardless of where they operate, must still file an Annual Franchise Tax Report. In addition, they must pay Franchise Tax for the privilege of incorporating in the state.

This requirement applies even if the corporation doesn’t do business in Delaware.

The minimum tax is $175 for corporations using the Authorized Shares method and $400 for those using the Assumed Par Value Capital Method.

Most corporations face a maximum tax of $200,000. However, those classified as Large Corporate Filers are subject to a $250,000 tax.

​Corporations owing $5,000 or more must pay estimated taxes in quarterly installments:

• 40% by June 1
• 20% by September 1
• 20% by December 1, and
• remaining 20% by March 1

In case of failure to file on time, you will incur a $200 penalty plus 1.5% monthly interest on unpaid balances.

Other entities, such as Limited Partnerships, Limited Liability Companies (LLCs), and General Partnerships formed in Delaware, do not file annual reports. Instead, they are required to pay a $300 annual tax, which is due by June 1.

Late payments incur a $200 penalty. Furthermore, interest accrues at a rate of 1.5% per month.

The Franchise Tax and Annual Report are due by March 1 each year. Filings must be done electronically through the Delaware Division of Corporations. Exempt domestic corporations do not pay tax but are still required to submit an Annual Report.​

 

Withholding Tax

If you run a business in Delaware and have employees, whether they live in the state or not, you’re generally required to withhold Delaware income tax from their wages. This applies as long as those wages are also subject to federal income tax withholding.

To do this, you’ll need to register with the Delaware Division of Revenue as a withholding agent and regularly send the withheld taxes to the state.

   

Delaware and Remote Sellers

Delaware does not have economic nexus laws for sales tax. Therefore, remote sellers are not required to collect or remit sales tax in the state.

However, Delaware-based businesses selling to customers in other states can still trigger a physical nexus, which may require them to register, collect, and remit sales tax according to each state’s specific rules.

 

Income Tax Nexus

Delaware’s income tax nexus standard is based on whether a business’s income-producing activities are connected to the state, rather than solely on physical, economic, or factor presence.

Instead, Delaware determines tax nexus on a case-by-case basis using a nexus questionnaire submitted by taxpayers.

Nexus-creating activities include:

• Owning or leasing property
• Using local banking services
• Shipping goods
• Extending credit
• Performing installations or repairs
• Employing agents
• Advertising, soliciting sales, handling inventory, and 
• Conducting credit checks in Delaware.

To make life easier, consider using sales tax software or consulting a tax professional, like TaxHero, to ensure accurate tax calculations and collections. Understanding these tax rules helps you stay compliant, whether you’re in-state or out-of-state.

 

Business Compliance Obligations in Delaware

Operating a business in Delaware involves several key compliance requirements.

All business entities in Delaware must obtain a State of Delaware Business License from the Delaware Division of Revenue. Also, this license is typically $75 for the first location. It must be renewed annually.

Separate licenses are required for each business activity. Businesses can apply for or renew licenses through Delaware’s One Stop Business Licensing and Registration Service.

Conclusion

Delaware doesn’t require businesses to collect state sales tax, but you still need to follow other tax rules and policies for compliance.

From the gross receipts tax to potential sales tax obligations in other states, it’s essential to stay informed about these matters.

To ensure your business stays tax compliant even in a no-sales-tax state, you can make things easier by consulting tax professionals like TaxHero. Schedule a call with our CEO, who will personally walk you through the intricacies of sales tax compliance in every state.

 

Montana is known for its wide-open spaces, rugged mountains, and one rare financial perk: no statewide sales tax. That’s right, sales tax in Montana doesn’t apply to most purchases, making it a shopper’s dream.

But while the Treasure State skips this common tax, there are still a few cases where you might pay extra charges on specific purchases.

This guide breaks down everything you need to know about Montana, one of the five states that do not have a sales tax. By the end of this comprehensive guide, you’ll understand Montana’s unique sales tax regulations with confidence and ease.

Is There Sales Tax in Montana?

If you plan to start a business in Montana, you may wonder whether the state imposes a sales tax. The short answer? Montana does not have a statewide sales tax.

Montana is one of only a few states in the U.S. that have chosen not to implement a general sales tax.

This policy dates back decades, with voters consistently rejecting proposals to implement a sales tax. The result is a tax-friendly environment for both residents and local businesses.

While the lack of a sales tax may sound like a break for businesses and consumers, it doesn’t mean there are no tax-related responsibilities for Montana business owners.

Beyond Montana Sales Tax: Other Taxes You Should Know

While you won’t be charging your customers a general sales tax, there are other tax types to keep in mind as a business owner in Montana.

Corporate Income Tax

Montana imposes a corporate income tax on corporations that conduct business or derive income within the state.

It’s designed to capture a fair share of taxes from corporations that benefit from Montana’s infrastructure and services, while also addressing the complexities associated with multi-state and international business operations.

The standard tax rate is 6.75%, with the option for corporations to elect using the water’s-edge method, which focuses taxation on US-based income and specific foreign sources, at a slightly higher rate of 7%.

This approach aims to prevent profit shifting to low-tax jurisdictions by requiring combined reporting of income from all entities within a unitary business, unless the water’s-edge election is made.

Mineral Royalty Withholding Tax

The Montana Mineral Royalty Withholding Tax is a state income tax requirement that mandates withholding on certain mineral royalty payments.

Specifically, when mineral royalties are paid from Montana-based production to nonresident individuals or out-of-state business entities, the payer, referred to as the “remitter,” must withhold 6% of the net royalty amount.

This withholding applies regardless of the recipient’s business structure, including individuals, trusts, partnerships, or corporations.

​Remitters are required to register with the Montana Department of Revenue and comply with specific filing obligations. These include:

• Submitting quarterly payment vouchers
• Filing an Annual Tax Reconciliation (Form RW-13)
• Providing Forms 1099-MISC or 1042-S to royalty owners.

The withheld amounts are considered trust funds held on behalf of the state, and remitters remain liable for proper withholding and reporting, even if they use third-party accounting services.

For royalty owners, the withheld tax can be claimed as a refundable credit against their Montana income tax liability. This information is typically reported on Form 1099-MISC (Box 15) or a Montana Schedule K-1, depending on the nature of the payment.​

Natural Resource Tax

Montana collects taxes on natural resources harvested in the state, including coal, metal, oil, and natural gas.

• Bentonite Production Tax
• Cement and Gypsum Producers License Tax
• Coal Gross Proceeds Tax
• Coal Severance Tax
• Electrical Energy Producers License Tax
• Metal Mines Gross Proceeds Tax
• Metal Mines License Tax
• Micaceous Mineral Mines License Tax
• Mineral Royalty Withholding Tax
• Miscellaneous Mines Net Proceeds Tax
• Oil and Natural Gas Production Tax
• Resource Indemnity Trust & Ground Water Assessment Tax
• Wholesale Energy Transaction (WET) Tax

 

Miscellaneous Tax

Montana has several taxes covering specific businesses, services, or locations. These taxes include telecommunications, tobacco, tourism, cannabis, and health care facilities.

• Alcohol Taxes
• Cannabis Tax
• Cigarette Taxes
• Consumer Counsel Fee (CCT)
• Contractor’s Gross Receipts Tax (CGR)
• Emergency Telephone System Fee
• General Sales Tax
• HELP Entity Fee (HEF)
• HELP Integrity Fee (HIF)
• Hospital Facility Utilization Fee (HUF)
• Intermediate Care Facility Utilization Fee (ICFUF)
• Local Resort Tax
• Lodging Facility Sales and Use Tax
• Moist Snuff Taxes
• Nursing Facility Utilization Fee (NFBT)
• Opioid Seller’s License
• Other Tobacco Product Taxes
• Public Service Regulation Fee (PSR)
• Rental Vehicle Tax (RVT)
• Retail Telecommunications Excise Tax (RTE)
• TDD Telecommunications Service Fee
• Unclaimed Property Holders
• Universal Systems Benefits Programs
• Unlocatable Mineral Trusts

 

Montana and Remote Sellers

Montana does not impose a statewide sales tax, and there are no economic nexus standards for sales tax in the state.

This means that out-of-state sellers are not required to collect or remit Montana sales tax on sales to Montana customers.

However, Montana does follow an economic presence standard for corporate income tax.

A business is considered to have nexus for income tax purposes if it is “engaged in business” in Montana, which is broadly defined as any activity carried out for profit.

Additionally, Montana applies the Joyce Rule, which states that only in-state activities conducted by or on behalf of the company can establish income tax nexus.

While Montana sales tax does not apply to in-state transactions, Montana-based businesses that sell to other states may still have sales tax obligations in those states.

Need help? Read our blog: Understanding Resale Exemptions for Your Business In Montana

If a business has a physical presence in another state, it may trigger physical nexus, requiring sales tax registration and collection.

Therefore, although Montana sales tax laws are minimal, businesses operating from Montana must still be proactive in understanding how multistate nexus laws affect their overall tax compliance.

To make life easier, consider using sales tax software or consulting a tax professional, like TaxHero, to ensure accurate tax calculations and collections. Understanding these tax rules helps you stay compliant, whether you’re in-state or out-of-state.

 

Business Compliance Obligations in Montana

Just because there’s no sales tax doesn’t mean you can skip registration. If you’re running a business in Montana, you may still need to:

• Register your business with the Montana Department of Revenue.
• Obtain appropriate business licenses depending on your industry.
• File and pay state tax and returns.

Check the state’s official business registration site to start and ensure you meet your obligations.

Conclusion

Montana may not have a general sales tax, but that doesn’t mean business owners are exempt from taxes and compliance.

From corporate income tax to potential nexus in other states, understanding your responsibilities and staying compliant is key to staying on the right side of the law.

To ensure your business stays tax compliant even in a no-sales-tax state, you can make things easier by consulting tax professionals like TaxHero. Schedule a call with our CEO, who will personally walk you through the intricacies of sales tax compliance in every state.

Home to 17 beautiful mountains with the tallest peaks, Alaska is a breathtaking place to visit. In Alaska, you can also climb to the top and conquer the business market when equipped with the right knowledge. The first step is learning how sales tax in Alaska works.

This guide breaks down everything you need to know about Alaska, one of the five states without sales tax. By the end of this comprehensive guide, you’ll understand Alaska’s unique tax regulations with confidence and ease.

Is There Sales Tax in Alaska?

Alaska has no statewide sales tax. However, Alaska allows its local municipalities to levy a sales tax. There are at least 107 jurisdictions that have different rates and rules regarding the imposition of the said tariff.

This brings the question: Why is there no statewide sales tax in Alaska?

The Last Frontier generates sufficient income from multiple sources, enough to relieve the need for a sales tax. Alaska’s main source of revenue is its thriving oil and gas industry, covering over 85% of the state’s finances.

Thanks to its earnings from the oil industry, Alaska developed a notable system called the Permanent Fund Dividend (PFD). This system provides Alaskans with a direct economic advantage through its annual dividend returns, effectively balancing the lack of a statewide sales tax.

The tourism industry is another huge contributor to Alaska’s finances. Without a statewide sales tax, Alaska attracts more tourists. This strategy creates more income and other opportunities for the state’s economy.

Additionally, Alaska also relies on the following industries:

• Fishing
• Timber
• Mining
• Agriculture

It’s also believed that the Last Frontier has strong values regarding freedom and limited governance. With this nature, it’s no surprise for Alaskans to have a flexible, multifaceted system when it comes to their taxes.

Alaska Local Sales Tax

Alaska has about 107 municipalities that levy a local sales tax with rates ranging from 1.00% to 7.00%. Since every city has its distinctive rules, doing business in Alaska means facing a variety of sales and use tax regulations.

After all, the taxability of specific goods and services changes depending on the local jurisdiction. Here’s an example of 2 localities with differing sales tax rates: 

• Juneau City and Borough, AK – sales of all goods, services, and non-residential rentals are subject to a 5.00% sales tax. An additional 3.00% sales tax is levied on sales of alcoholic beverages and 9.00% on sales of room rentals with less than 30 days of duration.
• Sitka City, AK – the sales tax in Sitka changes twice a year. Sales of all goods and services are subject to a 5.00% sales tax from October 1st to March 31st. This rate increases to 6.00% from April 1st to September 30th. Additional taxes may also be applied to sales of alcoholic beverages, tobacco, fish boxes, and room rentals.

To accurately determine the taxability of certain goods and services, Alaska advises businesses to contact the local municipalities for better guidance.

Alternatively, you may also access the Alaska Taxable to view an annual publication documenting all cities and the specific types of taxes they impose. However, this table only provides general information and may not contain every detail your business may need.

Beyond Alaska Sales Tax: Other Taxes You Should Know

• Alcoholic Beverage Tax
• Commercial Passenger Vessel Excise Tax
• Corporate Income Tax
• Electric Cooperative Tax
• Employment Security Tax
• Fisheries Related Tax
• Large Passenger Vessel Gambling Tax
• Marijuana Tax
• Mining License Tax
• Motor Fuel Tax
• Oil and Gas Production Tax
• Partnerships
• Regulatory Cost Charges
• Telephone Cooperative Tax
• Tire Fees
• Tobacco Tax
• Vehicle Rental Tax

Alcoholic Beverage Tax

• Wine – $2.50
• Liquor – $12.80
• Beer by Small Breweries – $0.35
• Beer (Malt Beverages) – $1.07 per gallon

Commercial Passenger Vessel (CPV) Excise Tax

• Exemption: Only applies to passengers onboarding commercial vessels not anchoring or mooring in state marine waters with intent to allow disembarking passengers.

Corporate Income Tax

• Returns are due 30 days after the federal due date.
• Due dates cannot be extended. You must pay your corporate income tax on or before the 15th of the 4th month after the tax year closes.
• Amount due $100,000 to $150,000 or beyond must be paid online, through Alaska’s Revenue Online website, or by a wire transfer.

Fisheries Related Tax

• Fisheries Business Tax – also known as “raw fish tax.” Applies to all processed fish in Alaska or unprocessed exported fish from Alaska. Rates vary between 1% to 5%. Fishermen who process the fish on board their ships and sell to licensed processors are exempt.
• Salmon Enhancement Tax
• Fishery Resource Landing Tax – Alaska imposes a 3% tax on established fisheries and a 1% tax on developing fisheries.
• Seafood Marketing Assessment Tax – The rate is 0.5% of the assessed value of seafood processed first in Alaska or exported from Alaska. Fishermen or processors producing less than $50,000 value of seafood are exempt from this tax.
• Regional Seafood Development Tax – A 1% tax is imposed on fish caught using drift or set gillnets that are sold in or exported from seafood regions (i.e, Prince William Sound and Bristol Bay).
• Dive Fishery Management Assessment – A 1% tax is levied on sea urchins and sea cucumbers. Meanwhile, a 7% tax is imposed on geoducks.

Large Passenger Vessel Gambling Tax

Other Resources Tax

• Mining License Tax – Businesses engaged in the mining industry in Alaska must pay the mining license tax. The tax is based on the business’s income, with rates ranging between 3% to 7%.
• Motor Fuel Tax – Varying tax rates are imposed on motor fuels. Gasoline used for heating by federal, state, or local government agencies, foreign flights, exports, or charities is exempt from local sales and use tax.
• Oil and Gas Production Tax – Alaska’s biggest source of revenue is its oil resources. Producing oil results in a 35% tax based on the value. On January 1, 2022, the rate for produced gas is 13% of the estimated value at the point of production.

Tobacco & Marijuana Tax

• $50 per ounce of marijuana
• $25 per ounce of immature or abnormal buds
• $15 per ounce of trimmed marijuana flower buds and
• $1 per clone of marijuana flower buds

Tire Fees

• Exemptions: Sales to the government (federal, state, or local) for official use are exempt from tire fees. Sales to resellers with resale certificates can also exempt the buyer from tire fees.

Vehicle Rental Tax

• Taxicab rentals by taxicab drivers
• Leases or rentals that exceed 90 consecutive days
• Trucks rented by individuals moving their personal property
• Lease or rentals used by government (federal, state, or local) agencies or employees
• Vehicles provided by automobile dealers as a means of replacement transportation during a buyer’s warranty, recall, or service repairs

Utility Taxes

• Electric Cooperative Tax – Applies to qualified electric cooperatives recognized under AS 10.25. The rate is $0.00025 per kilowatt hour for furnished electric energy and power to consumers lasting less than 5 years. For energy that lasts beyond 5 years, the rate is $0.0005 per kilowatt hour.
• Recovery Cost Charges – Alaska imposes regulatory cost charges on actively maintained utilities. The rates may vary depending on the city. For a complete list of all tax rates available in Alaska, visit the Alaska Regulatory Commission.
• Telephone Cooperative Tax – Qualified telephone cooperatives under AS 10.25 are subject to a 1% tax. This applies to furnished telephone services lasting less than 5 years. For furnished telephone services lasting longer than 5 years, the rate is 2%.

Alaska and Remote Sellers

Sales Tax Nexus

• Physical nexus or
• Economic nexus

Physical Nexus

1. Physical Location: Having an office, a place for distribution, sales, or showcasing products, a warehouse or storage facility, or any other place where you conduct business in a state.
2. Inventory in the State: This covers situations where you store your products within a state, even if it’s done through a third-party fulfillment center or 3PL (like Amazon FBA) or an online marketplace.
3. Employees, independent contractors, agents, or other representatives operating within a state on your behalf.
4. Business Operations: Includes farming and fishing operations in the state of Alaska.
5. Owning any leased or mobile property and intangible property (e.g., patents, copyrights, trademarks, franchises, stocks, bonds, notes, and bank deposits) can also create a nexus.

Economic Nexus

• Beginning April 1, 2020, the threshold for economic nexus in Alaska is $100,000 in gross revenue in the previous or current calendar year’s sales or the prior 12 months.

Business Compliance Obligations in Alaska

• Business Identification Information (name, address, phone number, email address)
• Business Entity Structure (sole proprietorship, partnership, corporation, LLC, etc.)
• Federal Employer Identification Number (EIN or FEIN)
• Owner/Partner/Officer Information
• IndustryActivity Details (description of products or services sold, sales volume, date of the first sale, or the expected date to start date)
• Alaska Professional License, other required Alaska licenses, and permits
• Alaska Registered Agent for Business Entities 
• Alaska NAICS Code

• Senior and Disabled Veteran Discount: Senior citizens and disabled veterans who are sole owners of their businesses only need to pay $25 for a Business License in Alaska.

Other Licenses in Alaska

• Alcoholic Beverage License
• Tobacco Products License

Conclusion

Serving as a cornerstone of industry and travel in the Southwest, the Lone Star State stands out for its sprawling landscapes, rich cultural heritage, and vibrant economic scene. Yet, mastering the nuances of sales tax in Texas demands a comprehensive grasp of its statutes and guidelines.

This guide breaks down everything you need to know about Texas’ sales tax, from determining the right sales tax rates to understanding exemptions and filing processes. By the end of this comprehensive guide, you’ll be equipped to handle Texas’s sales tax with confidence and ease.

Sales Tax Nexus in Texas

When a business creates either a physical or economic nexus, it is required to collect sales tax in Texas.

Physical Nexus

A physical nexus means having a significant physical presence or engaging in enough activities within a state to require the collection and payment of sales tax. The factors that determine a physical nexus in Texas include:

1. Physical Location: This includes having an office, a place for distribution, sales, or showcasing products (i.e., sample room), a warehouse or storage facility, or any other place where you conduct business. This includes ownership, usage, leases, or rents of tangible personal property in Texas.
2. Inventory in the State: This covers situations where you store your products within the state, even if it’s done through a third-party fulfillment center or 3PL (like Amazon FBA) or an online marketplace.
3. Employees, independent contractors, agents, or other representatives operating on your behalf.
4. Affiliate Nexus: An out-of-state seller may establish a taxable presence in Texas—if there is a significant ownership link with any entity in Texas that fulfills orders, shares a brand or product line, or conducts business activities that bolster the seller’s market within the state. This includes affiliates that manage distribution centers, conduct business under a similar name, or engage in activities on the seller’s behalf, such as handling returns.
5. Presence at Trade Show: Out-of-state sellers attending trade shows in Texas for product promotion and order solicitation are considered to be conducting business in the state, thereby requiring them to collect Texas use tax on sales, regardless of where the orders are processed or fulfilled. This applies even if a single order is taken at a trade show, whether from Texas residents or non-residents.

To stay informed about the current criteria for establishing a physical sales tax nexus in Texas, take a look at the official regulations available right here!

Economic Nexus

States have established regulations to collect sales tax from out-of-state sellers who meet certain revenue and/or transaction thresholds. This rule is known as economic nexus.

Beginning October 1, 2019, the threshold for economic nexus in Texas is $500,000 in gross revenue in the prior 12 months.

While the nexus criteria mentioned above generally apply to most businesses, additional methods exist for establishing economic sales tax nexus. To access a comprehensive list of these rules, please refer to the governing laws for economic sales tax nexus requirements in Texas.

Texas Sales Tax on Goods and Services

One of the first things you need to know is whether the goods you’re selling or services you’re offering are taxable in Texas.

Tangible Products

Almost all goods are taxable in Texas, including:

• Cosmetics
• Electronics
• Clothing
• Jewelry
• Home Goods

The goods that are exempt from sales tax are:

• Groceries – In Texas, most foods meant for human consumption are not subject to sales tax. However, certain types of food and drinks, including prepared meals, candy, soft drinks, and alcoholic beverages, do not qualify for this tax exemption and are therefore taxable.
• Baby Products (i.e., Diapers, Baby Food, Baby Bottles, Baby Wipes, Milk, Formula, Medicated products) – S.B. 79 was passed on September 1, 2023 to eliminate sales tax on these items.
• Feminine Hygiene Products (i.e., pads, tampons, and menstrual cups) – Effective September 1, 2023
• Prescription Medications
• Nutritional Supplements (i.e., herbal products, mineral products, vitamins)
• Over-the-Counter Drugs and Medicines (when required by the FDA to be labeled with a Drug Facts panel)
• Textbooks
• Medical Devices
• Energy-efficient Appliances – Texas offers tax exemptions for energy-efficient products.

Services

In Texas, the majority of service-based transactions, such as professional services, advertising, and cleaning services, are subject to sales tax.

However, there are specific situations where certain services are tax-exempt. For instance, non-taxable services are:

• Medical Services
• Project Management – purchases of tools, machinery, equipment, supplies, and consumable items and its charges for labor and materials for nonresidential (commercial) real property repair, remodeling, or restoration are taxable.
• Employment Services

Software-As-A-Service (SaaS)/Digital Products

SaaS is taxable because it is considered a data processing service.

Digital products (i.e., ebooks, downloadable video content, mobile apps) are also taxable.

Shipping/Handling

Shipping and handling charges in Texas are taxable.

Sales tax is exempt if:

• The buyer/customer paid the shipping charge separately from the sale of the product to the shipping carrier or delivery/freight company, or 
• The item is exempt.

Sales Tax Permits and Licenses in Texas

Now that you’ve got a handle on when sales tax nexus applies and which products are taxable in Texas, the next important step is getting your Texas Seller’s Permit, also known as a sales tax permit.

Seller’s Permit

You can register for a seller’s permit online through the Texas Comptroller of Public Accounts or follow our detailed step-by-step guide for assistance.

Ensure you have specific information on hand when registering for a seller’s permit, including, but not limited to:

• Business Identification Information (name, address, phone number, email address)
• Business Entity Structure (sole proprietorship, partnership, corporation, LLC, etc.)
• Federal Employer Identification Number (EIN or FEIN)
• Owner/Partner/Officer Information
• Business Activity Details (description of products or services sold, sales volume, date of the first sale or the expected date to start dates)
• North American Industrial Classification System (NAICS) code

Registration fee

There is no fee to register for a sales tax permit.

Renewal

In Texas, you don’t have to renew your sales tax permit. Texas sales tax permits renew each year automatically, so business owners don’t need to renew them themselves. But, the permit only stays valid if you’re actively selling as a business.

Resale Certificate

A resale certificate is a document that allows businesses to purchase products without paying sales tax, provided they plan to resell them to customers, who will then pay the tax. As a seller, you can also accept resale certificates from buyers looking to resell.

In Texas, sellers use resale certificates to purchase goods from their suppliers for resale. The issuance of the certificates is always done in good faith that the seller will report tax on the final sale of the items.

You can fill out the 01-339 Texas Sales and Use Tax Resale Certificate provided by Texas after you receive your sales tax permit. If you don’t want the hassle of registering, sign up for our all-inclusive service that includes sales tax registration.

Need help? Read our blog: How to Get a Texas Resale Certificate for your Business

Streamlined Sales Tax (SST)

The Streamlined Sales Tax (SST) is an initiative to simplify and standardize sales tax regulations across multiple states. However, Texas is not a party to this program, meaning it does not follow the uniform rules and definitions established by SST but has its own sales tax regulations.

Calculating and Collecting Sales Tax in Texas

Sales Tax Computation

In Texas, sales tax isn’t just one simple rate; it’s a combination of state and local taxes. To figure out the total sales tax for your calculation, you’ll need to add up the rates for the state, county, and city (if applicable) where your transaction occurs. Use TaxHero’s Texas Sales Tax Calculator to compute for sales tax.

Here’s an example. Suppose an out-of-state seller satisfies the economic nexus criteria in Texas and sells to a customer in Houston, TX, with a ZIP code of 77002. In that case, the seller has to charge the customer a total sales tax, which can be broken down as follows:

SALES TAX FORMULA RATE State: Texas 6.25% County: Harris 0.00% District: Downtown 1.00% City: Houston 1.00% Combined Sales Tax Rate = 8.25%

Origin-based vs. Destination-based

When making in-state sales, it is important to determine if you are located in an origin or destination-based state to figure out what rate to charge for sales tax.

Texas is an origin-based state, meaning sales tax is determined based on the seller’s location. That means, for a Texas-based seller, sales tax is generally based on the seller’s location when selling within the state.

For out-of-state or remote sellers, the sales tax rate is always determined by the buyer’s location. For instance, if you’re selling a product from Illinois to a customer in Houston, Texas, where you have nexus, you’d apply Houston’s sales tax rate to that sale.

To make life easier, consider using sales tax software or consulting a tax professional, like TaxHero, to ensure accurate tax calculations and collections. Understanding these tax rules helps you stay compliant, whether you’re in-state or out-of-state.

Filing and Remitting Sales Tax Returns in Texas

The next step after collection is filing and remitting your Texas sales tax returns. Filing and remittance can vary in frequency, typically monthly, quarterly, or annually.

It’s crucial to keep accurate records of your sales and tax collections and adhere to the filing schedule set by the state to remain compliant with Texas’ sales tax regulations.

Due Dates

In Texas, the due date falls on the 20th day of the following month. For instance, sales tax collected in January is due by February 20th for monthly filers.

However, if this day is a holiday, weekend, or in the rare occurrence of a natural disaster, the deadline is typically extended to the next business day. For instance, if you’re a monthly filer and filing sales tax for the month of April, and the May 20th deadline falls on a holiday or weekend, you’ll have until May 21st, the following business day, to submit.

Quarterly/Monthly Prepayments

Businesses with a notable sales tax liability may need to make monthly/quarterly prepayments ahead of their monthly/quarterly return filings. The specifics of these prepayments depend on the business’s prior year’s tax liabilities.

If you pay your taxes monthly or quarterly, you can get a 1.25% discount for paying early. This is on top of the 0.5% discount you get for filing your taxes and payments on time.

Filing Sales Tax Returns

To file your sales tax return for Texas, a few options are available:

1. File online through the Texas Comptroller of Public Accounts.
2. File by mail – Download a Texas Sales and Use Tax Return here.
3. File with TaxHero – Let TaxHero take care of it so you don’t have to worry about missing a payment or return.

Timely Filing Discount

Some states offer a discount to businesses for collecting, filing, and remitting sales tax on time as an incentive to process sales taxes promptly.

In Texas, permitted sales taxpayers are eligible for a 0.5% discount on the tax amount they report and pay on time.

Sales Tax Holiday

Currently, for 2026, the planned sales tax holidays in Texas are:

Texas Sales Tax Penalties

As in most states, sales tax is a major source of revenue for Texas. Thus, maintaining compliance with sales tax regulations is of utmost importance. Failure to do so can result in penalties and sales tax penalties. Therefore, it is crucial to always ensure you are up-to-date in filing, collecting, and remitting sales tax to the state.

Here are the specific penalties for non-compliance with sales tax regulations in Texas:

• $50 penalty for each late report.
• 5% penalty if tax is paid 1-30 days late.
• 10% penalty if tax is paid more than 30 days late.

Tennessee, often celebrated as the Volunteer State for its rich history of civic involvement, stands as a musical heritage and economic vitality. Known for its vibrant culture, this state offers a unique landscape for businesses. However, mastering the nuances of Tennessee sales tax exemptions is crucial for entrepreneurs looking to thrive in Tennessee’s distinct business milieu.

This guide breaks down everything you need to know about Tennessee’s sales tax, from determining the right sales tax rates to understanding exemptions and filing processes. By the end of this comprehensive guide, you’ll be equipped to handle Tennessee’s sales tax with confidence and ease.

Sales Tax Nexus in Tennessee

When a business creates either a physical or economic nexus, it is required to collect sales tax in Tennessee.

Physical Nexus

A physical nexus means having a significant physical presence or engaging in enough activities within a state to require the collection and payment of sales tax. The factors that determine a physical nexus in Tennessee include:

1. Physical Location: This includes having an office, a place for distribution, sales, or showcasing products, a warehouse or storage facility, or any other place where you conduct business. 
2. Inventory in the State: This covers situations where you store your products within the state, even if it’s done through a third-party fulfillment center or 3PL (like Amazon FBA) or an online marketplace.
3. Employees, independent contractors, agents, or other representatives operating on your behalf.
4. Click-through Nexus: While Tennessee’s older click-through nexus rule referenced a $10,000 sales threshold, the state now primarily enforces sales tax obligations under its $100,000 economic nexus standard, which is the more relevant trigger for most sellers today.
5. Presence at Tradeshows: Company staff engaging in promotional activities within Tennessee, like attending trade shows, establishes nexus with the state.

Economic Nexus

States have established regulations to collect sales tax from out-of-state sellers who meet certain revenue and/or transaction thresholds. This rule is known as economic nexus.

Tennessee enacted a new law that reduces the threshold for sales tax collection from $500,000 to $100,000, effective October 1, 2020.

While the nexus criteria mentioned above generally apply to most businesses, additional methods exist for establishing sales tax nexus. To access a comprehensive list of these rules, please refer to the governing laws for sales tax nexus requirements in Tennessee.

Tennessee Sales Tax on Goods and Services

One of the first things you need to know is whether the goods you’re selling or services you’re offering are taxable in Tennessee.

Tangible Products

Almost all goods are taxable in Tennessee, including:

• Cosmetics
• Electronics
• Clothing – Clothing items are generally taxable in Tennessee. However, clothes sold by no-profit organizations may be exempt.
• Furniture
• Jewelry
• Home Goods
• Groceries – The sale of food and grocery items is taxable in Tennessee at a reduced rate of 4%.
  However, lawmakers are considering legislation to eliminate the grocery tax entirely. While not yet in effect as of 2026, this potential change could significantly affect statewide food taxation.
• Prepared food – Restaurant meals and ready-to-eat items are taxed at the full 7% state rate.

Tennesse sales tax exemptions include the following:

• Feminine Hygiene Products – HB 1218 officially exempts menstrual hygiene products from sales tax in Tennessee.
• Investment-grade coins, currency, and bullion
• Textbooks and Workbooks
• Newspapers and Periodicals 
• Healthcare Products – particularly prescription drugs, prescribed durable medical equipment for home use (e.g., humidifiers, blood pressure equipment), mobility enhancing equipment (e.g., wheelchairs, canes), prosthetic devices (e.g., artificial arms/legs, hearing aids), and other medical devices like enteral feeding systems and diabetic testing supplies.
• Gasoline
• Liquified gas and compressed natural gas
• Film, including negatives, used in the business of printing or typesetting
• Home communication terminals, remote control devices, and similar equipment
• purchased by a video programming service provider for sale/lease to its subscribers
• Air and water pollution control chemicals
• United States and Tennessee flags sold by nonprofit organizations
• Packaging
• Utility poles, anchors, guys, and conduits
• School meals
• Coin-operated telephone services

Services

In Tennessee, the majority of service-based transactions, such as professional services and advertising, are not subject to sales tax.

However, there are specific situations where certain services are taxable:

• Repair and installation services of tangible personal property or computer software
• Lodging services and rooms and short-term space rentals
• Cleaning of tangible personal property services 
• Animal bathing
• Telecommunication services
• Parking and storing of motor vehicles 
• Television programming services
• Ancillary services
• Enriching of uranium materials

Software-As-A-Service (SaaS)/Digital Products

SaaS is taxable in the state of Tennessee.

Digital products (i.e., downloaded video games, digital audio works, digital audio-visual works, digital books, and streaming videos) are also taxable. Specified digital products & remotely accessed software are taxed at the standard local tax rate of 2.5%. However, products such as digital newspapers or magazines, digital photographs or images, digital artwork, and digital greeting cards are not taxable.

Shipping/Handling

Shipping and handling charges in the state of Tennessee are taxable if the item is taxable.

Sales Tax Permits and Licenses in Tennessee

Now that you’ve got a handle on when sales tax nexus applies and which products are taxable in Tennessee, the next important step is getting your Tennessee Seller’s Permit, also known as a sales tax permit.

Seller’s Permit

You can register for a Sales Tax Permit online through the Tennessee Taxpayer Access Point (TNTAP) or follow our detailed step-by-step guide for assistance.

Ensure you have specific information on hand when registering for a seller’s permit, including, but not limited to:

• Business Identification Information (name, address, phone number, email address)
• Business Entity Structure (sole proprietorship, partnership, corporation, LLC, etc.)
• Federal Employer Identification Number (EIN or FEIN)
• Owner/Partner/Officer Information
• Business Activity Details (description of products or services sold, sales volume, date of the first sale or the expected date to start dates)

Registration fee

There is no fee to register for a sales tax permit.

Renewal 

In Tennessee, you don’t have to renew your sales tax permit. 

Resale Certificate

A resale certificate is a document that allows businesses to buy products without paying sales tax on them, as long as they plan to resell those items to customers, who will then pay the tax. As a seller, you can also accept resale certificates from others looking to buy for resale.

In Tennessee, sellers use resale certificates to buy goods from their suppliers that they intend to resell. The issuance of the certificates is always done in good faith that the seller would report tax on the final sale of the items.

You can fill out the Streamlined Sales and Use Tax Certificate of Exemption if you would like to get sales tax exemption for multiple states simultaneously or access the resale certificate provided by the Tennessee Department of Revenue after you receive your sales tax permit at TNTAP. If you don’t want the hassle of registering, sign up for our all-inclusive service that includes sales tax registration.

Need help? Read our blog: How to Get a Tennessee Resale Certificate for your Business

Streamlined Sales Tax (SST)

The Streamlined Sales Tax (SST) is an initiative to simplify and standardize sales tax regulations across multiple states. Tennessee has been a party to this program since October 1, 2005, meaning it follows the uniform rules and definitions established by SST.

Check with the Tennessee Department of Revenue for the most current information on Tennessee’s participation in the Streamlined Sales Tax initiative.

Calculating and Collecting Sales Tax in Tennessee

Sales Tax Computation

In Tennessee, sales tax isn’t just one simple rate; it’s a combination of state and local taxes. To figure out the total sales tax for your calculation, you’ll need to add up the rates for the state, county, and city (if applicable) where your transaction occurs. Use TaxHero’s Tennessee Sales Tax Calculator to compute for sales tax. 

Here’s an example. Suppose an out-of-state seller satisfies the economic nexus criteria in Tennessee and sells to a customer in Nashville, TN, with a ZIP code of 37013. In that case, the seller has to charge the customer a total sales tax, which can be broken down as follows:

SALES TAX FORMULA RATE State: Tennessee 7.000% County: Davidson 2.750% District: Fifth District 0.000% City: Nashville 0.000% Combined Sales Tax Rate = 9.750%

Origin-based vs. Destination-based 

When making in-state sales, it is important to determine whether you are in an origin-based or destination-based state to determine which sales tax rate to charge.

Tennessee is an origin-based state, meaning sales tax is determined based on the seller’s location. That means for a Tennessee-based seller, sales tax is generally based on the location of the seller when selling within the state.

For out-of-state or remote sellers, the sales tax rate is always determined by the buyer’s location. For instance, if you’re selling a product from New York to a customer in Nashville, Tennessee, where you have nexus, you’d apply Nashville’s sales tax rate to that sale.

To make life easier, consider using sales tax software or consulting a tax professional, like TaxHero, to ensure accurate tax calculations and collections. Understanding these tax rules helps you stay compliant, whether you’re in-state or out-of-state.

Filing and Remitting Sales Tax Returns in Tennessee

The next step after collection is to file and remit your Tennessee sales tax returns. Filing and remittance can vary in frequency, typically monthly, quarterly, or annually. Taxpayers with an average monthly sales and use tax liability of $1,000 or less for 12 consecutive months are authorized to file either monthly or quarterly.

It’s crucial to keep accurate records of your sales and tax collections and adhere to the filing schedule set by the state to remain compliant with Tennessee sales tax regulations.

Due Dates 

In Tennessee, the due date falls on the 20th day of the following month. For instance, sales tax collected in January is due by February 21st for monthly filers.

However, if this day is a holiday, weekend, or in the rare occurrence of a natural disaster, the deadline is typically extended to the next business day. For instance, if you’re a monthly filer and filing sales tax for the month of April, and the May 20th deadline falls on a holiday or weekend, you’ll have until May 21st, the following business day, to submit.

Filing Sales Tax Returns

To file your sales tax return for Tennessee, a few options are available:

1. File online through the TNTAP.
2. File with TaxHero – Let TaxHero take care of it so you don’t have to worry about missing a payment or return.

Timely Filing Discount

Some states offer a discount to businesses for collecting, filing, and remitting sales taxes on time as an incentive to process them promptly. However, Tennessee does not offer a discount.

Sales Tax Holiday

Currently, for 2026, the planned sales tax holiday in Tennessee is:

• Back to School Sales Tax Holiday (July 24-26, 2026) – School supplies and school art supplies for $100 and less, clothing apparel for $100 and less, and computers and laptops priced at $1,500 and less.

Tennessee Sales Tax Penalties

As in most states, sales tax is a major source of revenue for Tennessee. Thus, maintaining compliance with sales tax regulations is of utmost importance. Failure to do so can lead to consequences and sales tax penalties. Therefore, it is crucial to always ensure you are up-to-date in filing, collecting, and remitting sales tax to the state.

Here are the specific penalties for non-compliance with sales tax regulations in Tennessee:

• Civil penalties for late filing or payment amounting to a minimum of $15 regardless of the amount of tax due, and a maximum penalty of 25% of the total sales tax due; Whereas civil penalties for negligence carry a penalty of at least 10% of the underpayment
• On the criminal side, offenses can be classified as a felony, depending on the severity and specific circumstances.

Nestled in the majestic Rocky Mountains, Colorado’s stunning natural beauty and business-friendly policies make it a premier destination for entrepreneurs. However, successfully launching and running an enterprise here requires grappling with the complexities of the state’s sales tax codes. For both existing and aspiring business owners, having a handle on sales tax in Colorado is crucial for smooth sailing.

This guide breaks down everything you need to know about Colorado’s sales tax, from determining the right sales tax rates to understanding exemptions and filing processes. By the end of this comprehensive guide, you’ll be equipped to handle Colorado’s sales tax with confidence and ease.

Sales Tax Nexus in Colorado

It is important to understand that Colorado is a home-rule state. This means that many of its cities and counties have the authority to set their own sales tax rates and regulations independently of the state’s rules.

As of January 1, 2024, Colorado has 66 home-rule cities and two home-rule counties (Denver County and Bloomfield County). As a result, businesses operating in multiple home-rule jurisdictions within the state may find it challenging to navigate these varied regulations. Moreover, when a business establishes either a physical or economic nexus, it is required to collect sales tax in Colorado.

Physical Nexus

A physical nexus means having a significant physical presence or engaging in enough activities within a state to require the collection and payment of sales tax. The factors that determine a physical nexus in Colorado include:

1. Physical Location: This includes having an office, a place for distribution, sales, or showcasing products, a warehouse or storage facility, or any other place where you conduct business.
2. Inventory in the State: This covers situations where you store your products within the state, even if it’s done through a third-party fulfillment center or 3PL (like Amazon FBA) or an online marketplace.
3. Employees, independent contractors, agents, or other representatives operating on your behalf.
4. Presence at Trade Show: If you’re selling at a special event, you need to collect and pay sales taxes to the state. You can either pay these taxes directly to the Department or to the event organizer if they have a special event license. This option is available even if you have your own special event license. Before the event, make sure to get a special event license from the Department. Also, check with the event organizer or local government for any additional local sales tax rules.

Economic Nexus

States have established regulations to collect sales tax from out-of-state sellers who meet certain revenue and/or transaction thresholds. This rule is known as economic nexus.

Beginning December 1, 2018, the threshold for economic nexus in Colorado is $100,000 in gross revenue in the previous or current calendar year’s sales.

While the nexus criteria mentioned above generally apply to most businesses, additional methods exist for establishing sales tax nexus. To access a comprehensive list of these rules, please refer to the governing laws for sales tax nexus requirements in Colorado.

Colorado Sales Tax on Goods and Services

One of the first things you need to know is whether the goods you’re selling or the services you’re offering are taxable in Colorado.

Tangible Products

Almost all goods are taxable in Colorado, including:

• Cosmetics
• Electronics
• Clothing
• Furniture
• Jewelry
• Home Goods
• Personal Hygiene – Items such as soaps, paper products, and grooming items are taxable

The goods that are exempt from sales tax are:

• Groceries – Most food for home consumption is exempt from state sales tax. However, prepared food, dietary supplements, soft drinks, and liquor are examples of grocery items that are taxable. Additionally, while food items paid for with funds issued by the federal Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) or with food stamps are tax-exempt, any non-food grocery items purchased under these programs are still subject to sales tax. Finally, grocers must consider factors like the temperature at which items are sold to determine if they qualify as tax-exempt “food for home consumption” under Colorado law. Note: Although there is no state-imposed sales tax on grocery food, cities and counties may levy local sales taxes at their discretion (e.g., Denver).
• Feminine Hygiene Products – Products such as tampons, menstrual cups, sanitary napkins, pantiliners, etc., are exempt from sales tax in Colorado.
• Diapers – In Colorado, as of January 1, 2023, incontinence products and diapers are not subject to state sales and use taxes. This exemption includes various types of diapers and incontinence pads, but does not extend to items like clothing or general hygiene products.
• Prescription Medications – Prescription and nonprescription drugs, certain medical supplies, and durable medical equipment prescribed by a licensed practitioner are exempt from state sales tax. However, vitamins, dietary supplements, and other non-prescription medicines are taxable.
• Agricultural Supplies – Seeds, fertilizers, and machinery used directly in farming are exempt from sales tax.
• School-related items – Sales by schools and student organizations are exempt from state sales tax if proceeds benefit the school or approved student groups.

Services

In Colorado, the majority of service-based transactions, such as professional services, advertising, and cleaning services, are not subject to sales tax.

However, there are specific situations where certain services are taxable. For instance:

• Telephone and telegraph services
• Room and accommodation services
• Gas and electric services
• Certain utility services 

Software-As-A-Service (SaaS)/Digital Products

SaaS is not taxable in the state of Colorado.

Digital products (i.e., ebooks, downloadable video content, mobile apps) are taxable.

Shipping/Handling

Shipping and handling charges in Colorado are not taxable as long as both are separately stated in the customer invoice. However, retailers must collect a $0.27 Retail Delivery Fee on all deliveries by motor vehicle that include at least one item of taxable tangible personal property. This fee applies to each sale and is in addition to any other state sales or use taxes.

Sales Tax Permits and Licenses in Colorado

Now that you’ve got a handle on when sales tax nexus applies and which products are taxable in Colorado, the next important step is getting your Colorado Seller’s Permit, also known as a sales tax permit. Home rule refers to the authority granted to local jurisdictions, like cities and counties, to enact and administer their own sales and use taxes independently of state tax laws.

Colorado simplified sales tax permit regulations for remote sellers. Previously, businesses without a physical presence had to obtain separate licenses in each of Colorado’s home-rule cities. From July 1, 2022, these businesses can register statewide, avoiding the need for multiple local licenses with full effect on July 1, 2023.

Seller’s Permit

The registration process varies depending on the location of the business’s incorporation.

In-state businesses

• Standard Retail License (Sales Tax License) – for businesses that make retail sales in Colorado.
• Single Special Event License – for businesses with a temporary location other than their regular business location and valid for only one event with three or more vendors. This two-year license is free to all standard sales tax license holders.
• Multiple Special Event License – for businesses attending more than one special event. This two-year license is free to all standard sales tax license holders. It covers a two-year period when three or more vendors are at the event.
• Mobile Vendors – businesses selling out of a truck or other vehicle must have a sales tax license for their main office location. They should add jurisdiction “sites” to their sales tax license. There is no additional fee for these sites.

Out-of-state businesses

You can register for a Sales Tax License online through the Colorado Revenue Online or follow our detailed step-by-step guide for assistance.

Ensure you have specific information on hand when registering for a seller’s permit, including, but not limited to:

• Business Identification Information (name, address, phone number, email address)
• Business Entity Structure (sole proprietorship, partnership, corporation, LLC, etc.)
• Federal Employer Identification Number (EIN or FEIN)
• Owner/Partner/Officer Information
• Business Activity Details (description of products or services sold, sales volume, date of the first sale or the expected date to start dates)

Registration fee

The registration fee for a Colorado sales tax permit varies based on the time of application:

• $16 for January-June and $12 for July-December in the first year, and
• $8 for January-June, and $4 for July-December in the second year.

Additionally, new accounts must include a $50 deposit with the application, refundable after the business has collected and remitted $50 in state sales taxes.

Renewal

In Colorado, you can renew your sales tax permit every two years through the Renewal Application for Sales Tax License form. Applicants must pay a $16 fee, which is prorated based on the issuance date. Wholesale licenses expire on December 31st of odd-numbered years (e.g., 2023, 2026, 2027) unless revoked sooner by the CO Department of Revenue.

Resale Certificate

A resale certificate or wholesale license is a document that allows businesses to buy products without paying sales tax on them, as long as they plan to resell those items to customers, who will then pay the tax. As a seller, you can also accept resale certificates from others looking to buy for resale.

In Colorado, sellers use resale certificates to buy goods from their suppliers that they intend to resell. The issuance of the certificates is always done in good faith that the seller would report tax on the final sale of the items.

Businesses that plan to purchase items for resale without paying sales tax should obtain a Colorado sales tax account/license by completing the CR 0100 form. If you don’t want the hassle of registering, sign up for our all-inclusive service that includes sales tax registration.

Need help? Read our blog: How to Get a Colorado Resale Certificate for your Business

Streamlined Sales Tax (SST)

The Streamlined Sales Tax (SST) is an initiative to simplify and standardize sales tax regulations across multiple states. However, Colorado is not a party to this program, meaning it does not follow the uniform rules and definitions established by SST but has its own sales tax regulations.

Check with the Colorado Department of Revenue for the most current information on Colorado’s participation in the Streamlined Sales Tax initiative.

Calculating and Collecting Sales Tax in Colorado

Sales Tax Computation

In Colorado, sales tax isn’t just one simple rate; it’s a combination of state and local taxes. To figure out the total sales tax for your calculation, you’ll need to add up the rates for the state, county, and city (if applicable) where your transaction occurs. Additionally, the tax rate and rules can vary significantly in home rule jurisdictions, where local governments set and administer their own sales and use taxes independently. Use TaxHero’s Colorado Sales Tax Calculator to compute sales tax.

Here’s an example. Suppose an out-of-state seller satisfies the economic nexus criteria in California and sells to a customer in the home-rule city of Denver, CO, with a ZIP code of 80201. In that case, the seller has to charge the customer a total sales tax, which can be broken down as follows:

SALES TAX FORMULA RATE State: Colorado 2.90% County: Denver 0.00% District: Seventh District 1.10% City: Denver 4.81% Combined Sales Tax Rate = 8.81%*

*includes a fixed-amount Retail Delivery Fee

Origin-based vs. Destination-based

When making in-state sales, it is important to determine if you are located in an origin-based or a destination-based state to figure out what rate to charge for sales tax.

Colorado is a destination-based state, meaning sales tax is determined based on the buyer’s location. That means for a Colorado-based seller, sales tax is generally based on the location of the buyer when selling within the state.

For out-of-state or remote sellers, the sales tax rate is always determined by the buyer’s location. For instance, if you’re selling a product from California to a customer in Denver, CO, where you have nexus, you’d apply Denver’s sales tax rate to that sale.

To make life easier, consider using sales tax software or consulting a tax professional like TaxHero. We’ll ensure accurate tax calculations and collections. Understanding these tax rules helps you stay compliant, whether you’re in-state or out-of-state.

Filing and Remitting Sales Tax Returns in Colorado

The next step after collection is filing and remitting your Colorado sales tax returns. Filing and remittance can vary in frequency, typically monthly, quarterly, or annually.

• Annual Filing: If you collect sales tax of $50 or less per month
• Quarterly Filing: If you collect sales tax of more than $50 but less than $1,100 per month
• Monthly Filing: If you collect sales tax of more than $1,100 per month

It’s crucial to keep accurate records of your sales and tax collections and adhere to the filing schedule set by the state to remain compliant with Colorado sales tax regulations. Meanwhile, in self-collecting home rule cities, different filing requirements and guidelines may apply. For specific information on these jurisdictions, you may contact the respective local cities directly.

Due Dates

In Colorado, the due date falls on the 20th day of the following month. For instance, sales tax collected in January is due by February 20th for monthly filers.

However, if this day is a holiday, weekend, or in the rare occurrence of a natural disaster, the deadline is typically extended to the next business day. For instance, if you’re a monthly filer and filing sales tax for April, and the May 20th deadline falls on a holiday or weekend, you’ll have until May 21st, the following business day, to submit.

Filing Sales Tax Returns

To file your sales tax return for Colorado, a few options are available:

1. File online through the Revenue Online portal.
2. File by mail – Complete DR 0100 and mail it to the Colorado Department of Revenue.
3. File with TaxHero – Let TaxHero take care of it so you don’t have to worry about missing a payment or return.

Timely Filing Discount

Some states offer a discount to businesses for collecting, filing, and remitting sales tax on time. Colorado’s timely filing discount allows filers to retain 4.00% of their sales tax due or up to $1,000 per filing period. However, businesses with sales tax collections over $1,000,000 are not eligible for the filing discount.

Sales Tax Holiday

Colorado Sales Tax Penalties

Like in most states, sales tax is a big part of how Colorado generates revenue. Thus, maintaining compliance with sales tax regulations is of utmost importance. Failure to do so can lead to consequences and sales tax penalties. Therefore, it is crucial to always ensure you are up-to-date in filing, collecting, and remitting sales tax to the state.

Here are the specific penalties for non-compliance with sales tax regulations in Colorado:

• Civil penalties amounting to 10% of the unpaid tax. An additional 0.5% for each month the tax remains unpaid, up to a maximum total penalty of 18%;
• On the criminal side, offenses can be classified as either misdemeanors or Class 5 Felonies. This depends on the severity and specific circumstances.

Utah, often referred to as the Beehive State, is a confluence of pioneering spirit and contemporary commerce. Grasping the specific rules and nuances of sales tax in Utah is crucial for maneuvering its complex business terrain.

This guide breaks down everything you need to know about Utah’s sales tax, from determining the right sales tax rates to understanding exemptions and filing processes. By the end of this comprehensive guide, you’ll be equipped to handle Utah’s sales tax with confidence and ease.

Sales Tax Nexus in Utah

When a business creates either a physical or economic nexus, it is required to collect sales tax in Utah.

Physical Nexus

A physical nexus means having a significant physical presence or engaging in enough activities within a state to require collecting and paying sales tax. The factors that determine a physical nexus in Utah include:

1. Physical Location: This includes having an office, a place for distribution, sales, or showcasing products, a warehouse or storage facility, or any other place where you conduct business. 
2. Inventory in the State: This covers situations where you store your products within the state, even if it’s done through a third-party fulfillment center or 3PL (like Amazon FBA) or an online marketplace.
3. Affiliate Nexus: You can establish a physical nexus if your affiliates, whether online or in-person, are connected to a Utah-based seller and sell similar products with similar names. Nexus can also be triggered if the Utah-based seller promotes the out-of-state seller’s sales to Utah buyers, or if either the out-of-state or Utah-based seller owns more than 10% of the other, or if the affiliate wholly owns the seller, it can establish an affiliate nexus.
4. Regularly delivering property in Utah other than by a common carrier or U.S. mail, or leasing or servicing property located in Utah.
5. Regularly Soliciting Orders: If you often ask for business in Utah, it’s like setting up shop there. But if all you’re doing is online ads, sending emails and mailers, or making phone calls—that doesn’t count. You’re free from these specific tax rules if you’re just spreading the word from afar.

Economic Nexus

States have established regulations to collect sales tax from out-of-state sellers who meet certain revenue and/or transaction thresholds. This rule is known as economic nexus.

Beginning July 1, 2025, the threshold for economic nexus in Utah is $100,000 in gross revenue in the previous or current calendar year’s sales.

While the nexus criteria mentioned above generally apply to most businesses, additional methods exist for establishing sales tax nexus. To access a comprehensive list of these rules, please refer to the governing laws for sales tax nexus requirements in Utah. 

Utah Sales Tax on Goods and Services

One of the first things you need to know is whether the goods you’re selling or the services you’re offering are taxable in Utah.

Tangible Products

Almost all goods are taxable in Utah, including:

• Cosmetics
• Electronics
• Furniture
• Jewelry
• Automobiles 
• Home Goods,
• Groceries – In Utah, there’s a reduced 3% sales tax on grocery food, made up of 1.75% from the state, 1% from local areas, and 0.25% from the county, while sales of prepared food are taxed at a full rate.
• Clothing

The goods that are exempt from sales tax are:

• Medical devices
• Newspapers
• Prescription drugs
• Prosthetic devices
• Electricity and fuel for industrial use
• Semiconductor fabricating, processing, research, or development materials 

Services

In Utah, the majority of service-based transactions, such as professional services, advertising, and beauty services, are not subject to sales tax.

However, there are specific situations where certain services are taxable. For instance:

• Laundry and dry-cleaning services, if the buyer does not perform the labor
• Assisted cleaning or washing of tangible personal property, if the buyer does not perform the cleaning or washing labor
• Use of assisted amusement devices when the buyer does not operate the device or ride.
• In-state telecom services

For a full list, check the Utah Department of Revenue.

Software-As-A-Service (SaaS)/Digital Products

SaaS is taxable in the state of Utah.

Digital products (i.e., ebooks, downloadable video content, mobile apps) are also taxable.

Shipping/Handling

Shipping and handling charges in the state of Utah are taxable. If the shipping and handling charge is separately stated on the invoice to the customer, the delivery charge is not subject to sales or use tax.

Sales Tax Permits and Licenses in Utah

Now that you’ve got a handle on when sales tax nexus applies and which products are taxable in Utah, the next important step is getting your Utah Seller’s Permit, also known as a sales tax permit.

Seller’s Permit

You can register for a Sales and Use Tax License online through the Taxpayer Access Point or follow our detailed step-by-step guide for assistance.

Ensure you have specific information on hand when registering for a seller’s permit, including, but not limited to:

• Business Identification Information (name, address, phone number, email address)
• Business Entity Structure (sole proprietorship, partnership, corporation, LLC, etc.)
• Federal Employer Identification Number (EIN or FEIN)
• Owner/Partner/Officer Information
• Business Activity Details (description of products or services sold, sales volume, date of the first sale, or the expected date to start date)

Registration fee

There is no fee to register for a sales tax permit.

Renewal

In Utah, you don’t have to renew your sales tax permit.

Resale Certificate

A resale certificate is a document that allows businesses to buy products without paying sales tax on them, as long as they plan to resell those items to customers, who will then pay the tax. As a seller, you can also accept resale certificates from others looking to buy for resale.

In Utah, sellers use resale certificates to buy goods from their suppliers that they intend to resell. The issuance of the certificates is always done in good faith that the seller would report tax on the final sale of the items.

You can fill out the TC-21 Exemption Certificate provided by the Utah State Tax Commission after you receive your sales tax permit. You can also fill out the Streamlined Sales and Use Tax Certificate of Exemption if you would like to get sales tax exemption for multiple states simultaneously. If you don’t want the hassle of registering, sign up for our all-inclusive service that includes sales tax registration.

Need help? Read our blog: How to Get a Utah Resale Certificate for your Business

Streamlined Sales Tax (SST)

The Streamlined Sales Tax (SST) is an initiative to simplify and standardize sales tax regulations across multiple states. Utah has been a party to this program since October 1, 2012, meaning it follows the uniform rules and definitions established by SST.

Check with the Utah State Tax Commission for the most current information on Utah’s participation in the Streamlined Sales Tax initiative.

Calculating and Collecting Sales Tax in Utah

Sales Tax Computation

In Utah, sales tax isn’t just one simple rate; it’s a combination of state and local taxes. To figure out the total sales tax for your calculation, you’ll need to add up the rates for the state, county, and city (if applicable) where your transaction occurs. Use TaxHero’s Utah Sales Tax Calculator to compute sales tax.

Here’s an example. Suppose an out-of-state seller satisfies the economic nexus criteria in Texas and sells to a customer in Salt Lake City, UT, with a ZIP code of 84105. In that case, the seller has to charge the customer a total sales tax, which can be broken down as follows:

SALES TAX FORMULA RATE State: Utah 4.85% County: Salt Lake 2.40% District: First 0.00% City: Salt Lake 0.50% Combined Sales Tax Rate = 7.75%

Origin-based vs. Destination-based 

When making in-state sales, it is important to determine if you are located in an origin-based or a destination-based state to figure out what rate to charge for sales tax.

Utah is an origin-based state, meaning sales tax is determined based on the buyer’s location. That means for a Utah-based seller, sales tax is generally based on the location of the buyer when selling within the state.

For out-of-state or remote sellers, the sales tax rate is always determined by the buyer’s location. For instance, if you’re selling a product from Texas to a customer in Salt Lake City, Utah, where you have nexus, you’d apply Salt Lake City’s sales tax rate to that sale.

To make life easier, consider using sales tax software or consulting a tax professional, like TaxHero, to ensure accurate tax calculations and collections. Understanding these tax rules helps you stay compliant, whether you’re in-state or out-of-state.

Filing and Remitting Sales Tax Returns in Utah

The next step after collection is filing and remitting your Utah sales tax returns. Filing and remittance can vary in frequency, typically monthly, quarterly, or annually. 

• If you owe up to $1,000 in sales tax annually, file monthly. 
• For amounts between $1,001 and $50,000, file quarterly. 
• Businesses with a sales tax liability of $50,001 to $96,000 should file monthly, with those owing 96,001 and more paying electronically.

It’s crucial to keep accurate records of your sales and tax collections and adhere to the filing schedule set by the state to remain compliant with Utah’s sales tax regulations.

Due Dates 

In Utah, the due date falls on the last day of the following month for monthly and quarterly filers. For instance, sales tax collected in January is due by February 28th (or 29th if it’s a leap year) for monthly filers.

However, if this day is a holiday, weekend, or in the rare occurrence of a natural disaster, the deadline is typically extended to the next business day. For instance, if you’re a monthly filer and filing sales tax for April, and the May 31st deadline falls on a holiday or weekend, you’ll have until June 1st, the following business day, to submit.

If you’re an annual filer, the due date for remittance falls on January 31 following the reported tax year.

Filing Sales Tax Returns

To file your sales tax return for Utah, a few options are available:

1. File online through the Utah Taxpayer Access Point.
2. File by mail – Fill out TC62S/M and remit to the Utah State Tax Commission by the due date.
3. File with TaxHero – Let TaxHero take care of it so you don’t have to worry about missing a payment or return.

Timely Filing Discount

Some states offer a discount to businesses for collecting, filing, and remitting sales tax on time as an incentive to process sales taxes promptly. Utah’s timely filing discount is 1.31% of the sales tax due.

Sales Tax Holiday

Utah Sales Tax Penalties

As in most states, sales tax is a major source of revenue for Utah. Thus, maintaining compliance with sales tax regulations is of utmost importance.

Here are the specific penalties for non-compliance with sales tax regulations in Utah:

• Civil penalties amounting to the greater of 10% of the total sales tax due or $20;
• On the criminal side, offenses can be classified as second or third-degree felonies, depending on the severity and specific circumstances.

Have any questions? Connect with TaxHero today for a free sales tax consultation about your business in Utah or any state!

In Minnesota, the Land of 10,000 Lakes, natural beauty blends seamlessly with a vibrant Midwestern spirit. Understanding sales tax in Minnesota means uncovering a system as balanced and dependable as the state’s renowned outdoor adventures and welcoming communities.

This guide breaks down everything you need to know about Minnesota’s sales tax, from determining the right sales tax rates to understanding exemptions and filing processes. By the end of this comprehensive guide, you’ll be equipped to handle Minnesota’s sales tax with confidence and ease.

Sales Tax Nexus in Minnesota

When a business creates either a physical or economic nexus, it is required to collect sales tax in Minnesota.

Physical Nexus

A physical nexus means having a significant physical presence or engaging in enough activities within a state to require the collection and payment of sales tax. The factors that determine a physical nexus in Minnesota include:

1. Physical Location: This includes having an office, a place for distribution, sales, or showcasing products, a warehouse or storage facility, or any other place where you conduct business.
2. Inventory in the State: This covers situations where you store your products within the state, even if it’s done through a third-party fulfillment center or 3PL (like Amazon FBA) or an online marketplace.
3. Employees, independent contractors, agents, or other representatives operating on your behalf.
4. Affiliate Nexus or Click-through Nexus: You could trigger a physical nexus if you have affiliates in Minnesota. This applies whether the affiliate operates online or in-person.
5. Presence at Trade Show: Participating in trade shows, seminars, or similar events to promote or conduct business in Minnesota counts as business activity. Each day involved in these activities contributes to establishing a physical presence for sales tax purposes.

Economic Nexus

States have established regulations to collect sales tax from out-of-state sellers who meet certain revenue and/or transaction thresholds. This rule is known as economic nexus.

Beginning October 1, 2019, the threshold for economic nexus in Minnesota is $100,000 in gross revenue or 200 transactions in the prior 12 months.

While the nexus criteria mentioned above generally apply to most businesses, additional methods exist for establishing economic sales tax nexus. To access a comprehensive list of these rules, please refer to the governing laws for economic sales tax nexus requirements in Minnesota.

Minnesota Sales Tax on Goods and Services

One of the first things you need to know is whether the goods you’re selling or the services you’re offering are taxable in Minnesota.

Tangible Products

Almost all goods are taxable in Minnesota, including:

• Cosmetics
• Electronics
• Furniture
• Jewelry
• Personal Hygiene – Grooming and hygiene products, including baby items, are taxable.
• Medical Devices – Durable medical equipment is taxable unless sold for home use or covered by Medicare or Medicaid. No certificate is needed for home use.

The goods that are exempt from sales tax are:

• Groceries – Food and food ingredients are tax-exempt. This includes items in liquid, solid, frozen, or dried form, meant for human consumption, and consumed for taste or nutrition.
• Home Goods
• Feminine Hygiene Products
• Prescription Medications – All drugs for human use, both prescribed and over-the-counter, are tax-exempt.
• Clothing – Clothing suitable for general use is exempt. This includes but is not limited to aprons, athletic supporters, baby receiving blankets, bathing suits, costumes, children’s and adult diapers, shoes, underwear, etc.
• Diapers
• Textbooks
• Agricultural Supplies: Qualifying new and used farm machinery is tax-exempt if it meets the legal definition, is used directly in farming, and is used at least 50% of the time for agriculture.

Services

In Minnesota, the majority of service-based transactions, such as professional services, advertising, and employment services, are not subject to sales tax.

However, there are specific situations where certain services are taxable. For instance, taxable services are:

• Massage
• Motor vehicle cleaning
• Software maintenance
• Pet grooming and animal boarding
• Pest control and exterminating services

Software as a Service (SaaS)/Digital Products

SaaS is not taxable in the state of Minnesota. However, software is taxable if bought, leased, or licensed to a customer and stored on a server in Minnesota.

Digital products (i.e., ebooks, downloadable video content, mobile apps) are taxable.

Shipping/Handling

Shipping and handling charges in Minnesota are taxable if the sale of the item is taxable. If the item is exempt, the shipping charge is also exempt. 

Sales Tax Permits and Licenses in Minnesota

You can register for a seller’s permit online through the Minnesota Department of Revenue (MNDOR) or follow our detailed step-by-step guide for assistance.

Seller’s Permit

A common area of confusion for many new business owners is understanding the need for a Sales and Use Tax Permit, also known as a seller’s permit. You can register for a Minnesota sales tax permit online at the Minnesota Tax Portal (MTP) or follow our detailed step-by-step guide for assistance.

Ensure you have specific information on hand when registering for a seller’s permit, including, but not limited to:

• Business Identification Information (name, address, phone number, email address)
• Business Entity Structure (sole proprietorship, partnership, corporation, LLC, etc.)
• Federal Employer Identification Number (EIN or FEIN)
• Owner/Partner/Officer Information
• Business Activity Details (description of products or services sold, sales volume, date of the first sale, or the expected start date)
• NAICS code

Registration fee

There is no fee to register for a sales tax permit.

Renewal

In Minnesota, you don’t have to renew your sales tax permit.

Resale Certificate

A resale certificate is a document that allows businesses to buy products without paying sales tax on them as long as they plan to resell those items to customers, who will then pay the tax. As a seller, you can also accept resale certificates from others looking to buy for resale.

In Minnesota, sellers use resale certificates to buy goods from their suppliers that they intend to resell. The issuance of the certificates is always done in good faith that the seller will report tax on the final sale of the items.

You can fill out the Minnesota form ST-3 – Certificate of Exemption provided by Minnesota after you receive your sales tax permit. You can also fill out the Streamlined Sales and Use Tax Certificate of Exemption if you would like to get sales tax exemption for multiple states simultaneously. If you don’t want the hassle of registering, sign up for our all-inclusive service that includes sales tax registration.

Need help? Read our blog: How to Get a Minnesota Resale Certificate for your Business

Streamlined Sales Tax (SST)

The Streamlined Sales Tax (SST) is an initiative to simplify and standardize sales tax regulations across multiple states. Minnesota is a party to this program, meaning it follows the uniform rules and definitions established by SST. 

Check with the Minnesota Revenue Services for the most current information on Minnesota’s participation in the Streamlined Sales Tax initiative.

Calculating and Collecting Sales Tax in Minnesota

Sales Tax Computation

In Minnesota, sales tax isn’t just one simple rate; it’s a combination of state and local taxes. To figure out the total sales tax for your calculation, you’ll need to add up the rates for the state, county, and city (if applicable) where your transaction occurs.

Here’s an example. Suppose an out-of-state seller satisfies the economic nexus criteria in Minnesota and sells to a customer in Rochester, MN, with a ZIP code of 55901. In that case, the seller has to charge the customer a total sales tax, which can be broken down as follows:

SALES TAX FORMULA RATE State: Minnesota 5.50% County: Cumberland County 0.00% District: First District 0.50% City: Rochester 0.75% Combined Sales Tax Rate = 8.13%

Origin-based vs. Destination-Based

When making in-state sales, it is important to determine if you are located in an origin-based state or a destination-based state to figure out what rate to charge for sales tax.

Minnesota is a destination-based state, meaning sales tax is determined based on the buyer’s location. That means for a Minnesota-based seller, sales tax is generally based on the location of the buyer when selling within the state.

For out-of-state or remote sellers, the sales tax rate is always determined by the buyer’s location. For instance, if you’re selling a product from Maine to a customer in Eagan, Minnesota, where you have nexus, you’d apply Eagan’s sales tax rate to that sale.

To make life easier, consider using sales tax software or consulting a tax professional, like TaxHero, to ensure accurate tax calculations and collections. Understanding these tax rules helps you stay compliant, whether you’re in-state or out-of-state.

Filing and Remitting Sales Tax Returns in Minnesota

The next step after collection is filing and remitting your Minnesota sales tax returns. Filing and remittance can vary in frequency, typically monthly, quarterly, or annually.

• Annual Filing: If your average monthly sales tax liability is less than $100, you are required to file annually.
• Quarterly Filing: For an average monthly liability between $100 and $500, quarterly filing is mandated.
• Monthly Filing: If your average monthly sales tax liability exceeds $500, you must file monthly. 

It’s crucial to keep accurate records of your sales and tax collections and adhere to the filing schedule set by the state to remain compliant with Minnesota’s sales tax regulations.

Due Dates

In Minnesota, the due date falls 20th day of the following month. For instance, sales tax collected in January is due by February 20th for monthly filers.

However, if this day is a holiday, weekend, or in the rare occurrence of a natural disaster, the deadline is typically extended to the next business day. For instance, if you’re a monthly filer and filing sales tax for April, and the May 20th deadline falls on a holiday or weekend, you’ll have until May 21st, the following business day, to submit.

Filing Sales Tax Returns

To file your sales tax return for Minnesota, a few options are available:

1. File online through the Minnesota Department of Revenue.
2. File by phone – To file by touch-tone phone, call 1-800-570-3329. If your sales and use tax liability is $10,000 or more during the state’s fiscal year (July 1 – June 30), you must pay all taxes electronically starting the next calendar year.
3. File with TaxHero – Let TaxHero take care of it so you don’t have to worry about missing a payment or return. 

Timely Filing Discount

Some states offer a discount to businesses for collecting, filing, and remitting sales tax on time as an incentive to process sales taxes promptly. However, Minnesota does not offer a discount.

Sales Tax Holiday

Minnesota Sales Tax Penalties

Like in most states, sales tax is a big part of how Minnesota generates revenue. Thus, maintaining compliance with sales tax regulations is of utmost importance. Failure to do so can lead to consequences and sales tax penalties. Therefore, it is crucial to always ensure you are up-to-date in filing, collecting, and remitting sales tax to the state.

Here are the specific penalties for non-compliance with sales tax regulations in Minnesota:

• Late Filing Penalty: 5% of the unpaid tax if filed late.
• Late Payment Penalty: 5% to 15% of the unpaid tax, depending on the delay.
• Interest: Interest is charged on any unpaid tax from the due date until the tax is paid in full. The interest rate is determined annually by the Minnesota Department of Revenue.

Renowned for its vibrant arts scene, iconic Southwestern cuisine, and dynamic history, New Mexico, often celebrated as the “Land of Enchantment,” presents a distinctive challenge for enterprises, especially ecommerce businesses. Understanding the nuances of sales tax in New Mexico is crucial to flourishing in this state.

This guide breaks down everything you need to know about New Mexico’s sales tax, also known as gross receipts tax, from determining the right sales tax rates to understanding exemptions and filing processes. By the end of this comprehensive guide, you’ll be equipped to handle New Mexico’s sales tax with confidence and ease.

Sales Tax Nexus in New Mexico

When a business creates either a physical or economic nexus, it is required to collect gross receipts tax/sales tax in New Mexico. Businesses add this tax to the price of their products or services, which means customers end up paying it. For the customer, the gross receipts tax feels a lot like a sales tax because it increases the price of what they buy.

Physical Nexus

A physical nexus means having a significant physical presence or engaging in enough activities within a state to require the collection and payment of sales tax. The factors that determine a physical nexus in New Mexico include:

1. Physical Location: This includes having an office, a place for distribution, sales, or showcasing products, a warehouse or storage facility, or any other place where you conduct business.
2. Inventory in the State: This covers situations where you store your products within the state, even if it’s done through a third-party fulfillment center or 3PL (like Amazon FBA) or an online marketplace.
3. Employees, independent contractors, agents, or other representatives operating on your behalf.
4. Soliciting orders through advertisements in New Mexico, whether in newspapers, magazines, radio, or television.
5. Leasing equipment in New Mexico.
6. License using intangible personal property in New Mexico.
7. Transporting properties in New Mexico using taxpayers’ vehicles.
8. Performing services in New Mexico.

Economic Nexus

States have established regulations to collect sales tax from out-of-state sellers who meet certain revenue and/or transaction thresholds. This rule is known as economic nexus.

Beginning July 1, 2019, the threshold for economic nexus in New Mexico is $100,000 in gross revenue in the previous calendar year’s sales.

While the nexus criteria mentioned above generally apply to most businesses, additional methods exist for establishing sales tax nexus. To access a comprehensive list of these rules, please refer to the governing laws for sales tax nexus requirements in New Mexico.

New Mexico Sales Tax on Goods and Services

One of the first things you need to know is whether the goods you’re selling or the services you’re offering are taxable in New Mexico.

Tangible Products

Almost all goods are taxable in New Mexico, including:

• Cosmetics
• Electronics
• Clothing
• Furniture
• Jewelry
• Home Goods

The goods that are exempt from sales tax are:

• Groceries – Food products intended for human consumption except alcohol products, hot food, cocoa, and hot food for immediate consumption are exempt from sales tax
• Diapers
• Feminine Hygiene Products – Products such as pads, tampons, and menstrual cups are not subject to sales tax in New Mexico
• Agriculture Products
• Durable medical equipment and prescription medications

Services

In New Mexico, the majority of service-based transactions, such as professional services, advertising, and cleaning services, are subject to sales tax.

However, there are specific situations where certain services are exempt:

• New Mexico Activities Association-sanctioned refereeing, umpiring, scoring, or other officiating events
• Employee services
• Interstate telecommunication services
• Specified research and development services 

Software-As-A-Service (SaaS)/Digital Products

SaaS is taxable in the state of New Mexico.

Digital products (i.e., ebooks, downloadable video content, mobile apps) are also taxable.

Shipping/Handling

Shipping and handling charges in the state of New Mexico are taxable if the seller paid the shipping charge separately from the product’s sale to the shipping carrier, delivery, or freight company. You may charge your customer sales tax on the shipping fee or pay for it yourself when you file your return.

Sales Tax Permits and Licenses in New Mexico

Now that you’ve got a handle on when sales tax nexus applies and which products are taxable in New Mexico, the next important step is getting your New Mexico Gross Receipts Tax Permit, also known as a sales tax permit.

Seller’s Permit

You can register for a Gross Receipts Tax Permit online through the New Mexico Taxpayer Access Point (TAP) or follow our detailed step-by-step guide for assistance.

Ensure you have specific information on hand when registering for a seller’s permit, including, but not limited to:

• Business Identification Information (name, address, phone number, email address)
• Business Entity Structure (sole proprietorship, partnership, corporation, LLC, etc.)
• Federal Employer Identification Number (EIN or FEIN)
• Owner/Partner/Officer Information
• Business Activity Details (description of products or services sold, sales volume, date of the first sale, or the expected start date)

Registration fee

There is no fee to register for a sales tax permit.

Renewal

In New Mexico, you don’t have to renew your sales tax permit.

Resale Certificate

A resale certificate is a document that allows businesses to buy products without paying sales tax on them, as long as they plan to resell those items to customers, who will then pay the tax. As a seller, you can also accept resale certificates from others looking to buy for resale.

In New Mexico, sellers use resale certificates to buy goods from their suppliers that they intend to resell. The issuance of the certificates is always done in good faith that the seller will report tax on the final sale of the items.

You can fill out the ACD-3150 – Application for Nontaxable Transaction Certificate provided by the New Mexico Department of Taxation and Revenue after you receive your sales tax permit. If you don’t want the hassle of registering, sign up for our all-inclusive service that includes sales tax registration.

Need help? Read our blog: How to Get a New Mexico Resale Certificate for your Business

Streamlined Sales Tax (SST)

The Streamlined Sales Tax (SST) is an initiative to simplify and standardize sales tax regulations across multiple states. However, New Mexico is not a party to this program, meaning it does not follow the uniform rules and definitions established by SST but has its own sales tax regulations.

Check with the New Mexico Department of Taxation and Revenue for the most current information on New Mexico’s participation in the Streamlined Sales Tax initiative.

Calculating and Collecting Sales Tax in New Mexico

Sales Tax Computation

In New Mexico, sales tax, also known in the state as the Gross Receipts Tax, isn’t just one simple rate; it’s a combination of state and local taxes. To figure out the total sales tax for your calculation, you’ll need to add up the rates for the state, county, and city (if applicable) where your transaction occurs. Use TaxHero’s New Mexico Sales Tax Calculator to compute sales tax.

Here’s an example. Suppose an out-of-state seller satisfies the economic nexus criteria in New Mexico and sells to a customer in Albuquerque, NM, with a ZIP code of 87101. In that case, the seller has to charge the customer a total sales tax, which can be broken down as follows:

SALES TAX FORMULA RATE State: New Mexico 4.875% County: Bernalillo 0.000% District: First 3.200% City: Albuquerque 0.000% Combined Sales Tax Rate = 8.075%

Origin-based vs. Destination-based

When making in-state sales, it is important to determine if you are located in an origin-based or a destination-based state to figure out what rate to charge for sales tax.

New Mexico is a destination-based state, meaning sales tax is determined based on the buyer’s location. That means for a New Mexico-based seller, sales tax is generally based on the location of the buyer when selling within the state.

For out-of-state or remote sellers, the sales tax rate is always determined by the buyer’s location. For instance, if you’re selling a product from Florida to a customer in Albuquerque, New Mexico, where you have nexus, you’d apply Albuquerque’s sales tax rate to that sale.

To make life easier, consider using sales tax software or consulting a tax professional, like TaxHero, to ensure accurate tax calculations and collections. Understanding these tax rules helps you stay compliant, whether you’re in-state or out-of-state.

Filing and Remitting Sales Tax Returns in New Mexico

The next step after collection is filing and remitting your New Mexico sales tax returns. Filing and remittance can vary in frequency, typically monthly, quarterly, or semi-annually. 

• Monthly Filing: If your sales tax liability averages $200 or more per month
• Quarterly Filing: If your sales tax liability is $600 or less per quarter
• Semi-Annual Filing: If your sales tax liability is less than $1,200 during the six months or an average of less than $200 per month for the six months.

It’s crucial to keep accurate records of your sales and tax collections and adhere to the filing schedule set by the state to remain compliant with New Mexico’s sales tax regulations.

Due Dates 

In New Mexico, the due date falls on the 25th day of the following month. For instance, sales tax collected in January is due by February 25th for monthly filers.

However, if this day is a holiday, weekend, or in the rare occurrence of a natural disaster, the deadline is typically extended to the next business day. For instance, if you’re a monthly filer and filing sales tax for April, and the May 25th deadline falls on a holiday or weekend, you’ll have until May 26th, the following business day, to submit.

Filing Sales Tax Returns

To file your sales tax return for New Mexico, a few options are available:

1. File online through the New Mexico Taxpayer Access Point (TAP).
2. File by mail – Fill out the TRD-41413 form and mail it to the New Mexico Department of Taxation and Revenue.
3. File with TaxHero – Let TaxHero take care of it so you don’t have to worry about missing a payment or return.

Timely Filing Discount

Some states offer a discount to businesses for collecting, filing, and remitting sales tax on time as an incentive to process sales taxes promptly. However, New Mexico does not offer a discount.

Sales Tax Holiday

• Back to School Tax Free Holiday (Dates to be announced): Various school-related items are exempt from gross receipts tax, such as:
  • Clothing and shoes ($100/unit or less)
  • Computers and related devices ($1,000 or less)
  • Specific computer-related items – $500 or less per item
  • Book bags, backpacks, maps, and globes (less than $100 per item)
  • Handheld calculators (less than $200 per item)

New Mexico Sales Tax Penalties

Like in most states, sales tax is a big part of how New Mexico generates revenue. Thus, maintaining compliance with sales tax regulations is of utmost importance. Failure to do so can lead to consequences and sales tax penalties. Therefore, it is crucial to always ensure you are up-to-date in filing, collecting, and remitting sales tax to the state.

Here are the specific penalties for non-compliance with sales tax regulations in New Mexico:

• Civil penalties are calculated by adding a penalty of 2% per month (up to 20% or at least $5) and daily interest at 7% annually to the tax owed. Even if you don’t owe tax, a $5 penalty applies, and while the penalty has a cap, the interest keeps accruing until payment unless it’s under $1.
• On the criminal side, offenses can be classified as a felony, depending on the severity and specific circumstances.

In Maine, where rugged coastlines meet serene forests, and lighthouses stand tall against Atlantic waves, even the tax system reflects the state’s distinctive character. Learning sales tax in Maine is a straightforward process, shaped by the state’s practical and no-nonsense New England approach.

This guide breaks down everything you need to know about Maine’s sales tax, from determining the right sales tax rates to understanding exemptions and filing processes. By the end of this comprehensive guide, you’ll be equipped to handle Maine’s sales tax with confidence and ease.

Sales Tax Nexus in Maine

When a business creates either a physical or economic nexus, it is required to collect sales tax in Maine.

Physical Nexus

A physical nexus means having a significant physical presence or engaging in enough activities within a state to require the collection and payment of sales tax. The factors that determine a physical nexus in Maine include:

1. Physical Location: This includes having an office, a place for distribution, sales, or showcasing products, a warehouse or storage facility, or any other place where you conduct business.
2. Inventory in the State: This covers situations where you store your products within the state, even if it’s done through a third-party fulfillment center or 3PL (like Amazon FBA) or an online marketplace.
3. Employees, independent contractors, agents, or other representatives operating on your behalf.
4. Affiliate Nexus: A retailer is considered to have a business in Maine if a related company in the state sells similar products, shares a name or branding, helps with deliveries, or supports the retailer’s business in any way.
5. Presence at Trade Show: Attending a trade show in Maine doesn’t require an out-of-state business to collect tax, but if they take orders from Maine customers, they must collect tax on all sales, not just those from the trade show.

Economic Nexus

States have established regulations to collect sales tax from out-of-state sellers who meet certain revenue and/or transaction thresholds. This rule is known as economic nexus.

Beginning January 1, 2022, the threshold for economic nexus in Maine is $100,000 in gross revenue.

While the nexus criteria mentioned above generally apply to most businesses, additional methods exist for establishing economic sales tax nexus. To access a comprehensive list of these rules, please refer to the governing laws for economic sales tax nexus requirements in Maine.

Maine Sales Tax on Goods and Services

One of the first things you need to know is whether the goods you’re selling or the services you’re offering are taxable in Maine.

Tangible Products

Almost all goods are taxable in Maine, including:

• Cosmetics
• Electronics
• Clothing
• Furniture
• Jewelry
• Home Goods 

The goods that are exempt from sales tax are:

• Groceries – Grocery staples, which are basic foods for human nourishment, are not taxed, but this doesn’t include prepared foods or certain other items meant to be eaten or consumed.
• Diapers – Child diapers, both disposable and reusable, along with diaper covers, wraps, and pins for reusable diapers, are tax-free.
• Feminine Hygiene Products (i.e., pads, tampons, liners, and menstrual cups)
• Prescription Medications
• Medical Devices
• Agricultural Supplies: Seeds, fertilizers, and machinery used directly in farming are exempt.

Services

In Maine, most service-based transactions, such as advertising, employment services, and cleaning services, are not subject to sales tax. 

However, there are specific situations where certain services are taxable. For instance, taxable services are:

• Rentals or leases of automobiles
• Prepaid calling services
• Installation, maintenance, or repair of telecommunications equipment
• Fabrication services
• Rental of video media and video equipment 

Software as a Service (SaaS)/Digital Products

SaaS is not taxable in the state of Maine.

Digital products (i.e., ebooks, downloadable video content, mobile apps) are taxable. Digital products are taxed at the standard rate if their physical versions are also subject to sales tax.

Shipping/Handling

Shipping and handling charges in the state of Maine are not taxable. Shipping charges are not taxed if the product is shipped directly to the customer, sent via a carrier or U.S. mail, and the shipping cost is listed separately from the item’s price or other fees.

Sales Tax Permits and Licenses in Maine

Now that you’ve got a handle on when sales tax nexus applies and which products are taxable in Maine, the next important step is getting your Maine Seller’s Permit, also known as a sales tax permit.

Seller’s Permit

A common area of confusion for many new business owners is understanding the need for a Sales and Use Tax Permit, also known as a seller’s permit. You can register for a Maine sales tax permit online at the Maine Tax Portal (MTP) or follow our detailed step-by-step guide for assistance.

Ensure you have specific information on hand when registering for a seller’s permit, including, but not limited to:

• Business Identification Information (name, address, phone number, email address)
• Business Entity Structure (sole proprietorship, partnership, corporation, LLC, etc.)
• Federal Employer Identification Number (EIN or FEIN)
• Owner/Partner/Officer Information
• Business Activity Details (description of products or services sold, sales volume, date of the first sale, or the expected start date)
• NAICS code

Registration fee

There is no fee to register for a sales tax permit. 

Renewal

In Maine, you don’t have to renew your sales tax permit.

Resale Certificate

A resale certificate is a document that allows businesses to buy products without paying sales tax on them as long as they plan to resell those items to customers, who will then pay the tax. As a seller, you can also accept resale certificates from others looking to buy for resale.

In Maine, sellers use resale certificates to buy goods from their suppliers that they intend to resell. The issuance of the certificates is always done in good faith that the seller would report tax on the final sale of the items.

You can fill out the Uniform Sales & Use Tax Exemption/Resale Certificate provided by Maine after you receive your sales tax permit. If you don’t want the hassle of registering, sign up for our all-inclusive service that includes sales tax registration.

Need help? Read our blog: How to Get a Maine Resale Certificate for your Business

Streamlined Sales Tax (SST)

The Streamlined Sales Tax (SST) is an initiative to simplify and standardize sales tax regulations across multiple states. However, Maine is not a party to this program, meaning it does not follow the uniform rules and definitions established by SST but has its own sales tax regulations.

Check with the Maine Revenue Services for the most current information on Maine’s participation in the Streamlined Sales Tax initiative.

Calculating and Collecting Sales Tax in Maine

Sales Tax Computation

Maine keeps sales tax simple with a single statewide rate. No local taxes apply, so you only need to calculate based on the state’s fixed percentage.

Here’s an example. Suppose an out-of-state seller satisfies the economic nexus criteria in Maine and sells to a customer in Portland, ME, with a ZIP code of 04101. In that case, the seller has to charge the customer a total sales tax, which can be broken down as follows:

SALES TAX FORMULA RATE State: Maine 5.50% County: Cumberland County 0.00% District: First District 0.00% City: Portland 0.00% Combined Sales Tax Rate = 5.50%

Origin-based vs. Destination-Based

When making in-state sales, it is important to determine if you are located in an origin-based state or a destination-based state to figure out what rate to charge for sales tax.

Maine is a destination-based state, meaning sales tax is determined based on the buyer’s location. That means for a Maine-based seller, sales tax is generally based on the location of the buyer when selling within the state.

For out-of-state or remote sellers, the sales tax rate is always determined by the buyer’s location. For instance, if you’re selling a product from Ohio to a customer in Bangor, Maine, where you have nexus, you’d apply Maine’s sales tax rate to that sale.

To make life easier, consider using sales tax software or consulting a tax professional, like TaxHero, to ensure accurate tax calculations and collections. Understanding these tax rules helps you stay compliant, whether you’re in-state or out-of-state.

Filing and Remitting Sales Tax Returns in Maine

The next step after collection is filing and remitting your Maine sales tax returns. Filing and remittance can vary in frequency, typically monthly, quarterly, or annually.

• Monthly Filing: Required if your average tax liability is $600 or more per month.
• Quarterly Filing: Applicable if your average tax liability is at least $100 but less than $600 per month.
• Semiannual Filing: For businesses with an average tax liability of less than $100 per month but more than $50 per year.
• Annual Filing: Permitted if your average annual tax liability is $50 or less.

It’s crucial to keep accurate records of your sales and tax collections and adhere to the filing schedule set by the state to remain compliant with Maine’s sales tax regulations.

Due Dates

In Maine, the due date falls on the 15th day of the following month. For instance, sales tax collected in January is due by February 15th for monthly filers.

However, if this day is a holiday, weekend, or in the rare occurrence of a natural disaster, the deadline is typically extended to the next business day. For instance, if you’re a monthly filer and filing sales tax for April, and the May 15th deadline falls on a holiday or weekend, you’ll have until May 16th, the following business day, to submit.

Filing Sales Tax Returns

To file your sales tax return for Maine, a few options are available:

1. File online through the Maine Department of Revenue with Maine I-File.
2. File by mail – You can file and pay using form ST-7 by mail.
3. File with TaxHero – Let TaxHero take care of it so you don’t have to worry about missing a payment or return. 

Timely Filing Discount

Some states offer a discount to businesses for collecting, filing, and remitting sales tax on time as an incentive to process sales taxes promptly. However, Maine does not offer a discount.

Sales Tax Holiday

Maine Sales Tax Penalties

Like in most states, sales tax is a big part of how Maine generates revenue. Thus, maintaining compliance with sales tax regulations is of utmost importance. Failure to do so can lead to consequences and sales tax penalties. Therefore, it is crucial to always ensure you are up-to-date in filing, collecting, and remitting sales tax to the state.

Here are the specific penalties for non-compliance with sales tax regulations in Maine:

• Failure to File: A Class D crime for the first offense, escalating to a Class C crime for repeat offenses. Filing with intent to evade is also a Class D crime, but increases to Class C if the tax exceeds $2,000. Subsequent offenses exceeding $2,000 are Class B crimes.
• Failure to Pay: A Class D crime for the first offense, rising to a Class C crime for repeat offenses. Intentional non-payment is a Class D crime, but becomes Class C if the tax exceeds $2,000. Subsequent offenses exceeding $2,000 are Class B crimes.
• Intent to Evade: A Class D crime initially, upgraded to Class C if the tax exceeds $2,000. Repeat offenses are Class C crimes or Class B if the tax exceeds $2,000.

Kentucky, often referred to as the Bluegrass State for its rich heritage in horse racing and bourbon, presents a unique landscape for business ventures. Grappling with the sales tax in Kentucky involves delving into a complex web of regulations.

This guide breaks down everything you need to know about Kentucky’s sales tax, from determining the right sales tax rates to understanding exemptions and filing processes. By the end of this comprehensive guide, you’ll be equipped to handle Kentucky’s sales tax with confidence and ease.

Sales Tax Nexus in Kentucky

When a business creates either a physical or economic nexus, it is required to collect sales tax in Kentucky.

Physical Nexus

A physical nexus means having a significant physical presence or engaging in enough activities within a state to require the collection and payment of sales tax. The factors that determine a physical nexus in Kentucky include:

1. Physical Location: This includes having an office, a place for distribution, sales, or showcasing products, a warehouse or storage facility, or any other place where you conduct business. 
2. Inventory in the State: This covers situations where you store your products within the state, even if it’s done through a third-party fulfillment center or 3PL (like Amazon FBA) or an online marketplace.
3. Employees, independent contractors, agents, or other representatives operating on your behalf.
4. If a business regularly seeks orders for products, digital items, or extended warranty services from people in Kentucky and uses Kentucky-based services like banks, telecom systems, radio or TV stations, cable services, or any other local facility to take orders, communicate, or receive payments.
5. Earns money from leasing or renting out physical items located in Kentucky.
6. Affiliate Nexus: You could trigger a physical nexus if you have affiliates, whether they operate online or in-person, who maintain, operate, or use in Kentucky via a subsidiary or a related company, an office, distribution center, sales or sample room, warehouse, storage facility, or any other type of business location.
7. Presence at Tradeshows: You must collect sales tax at Kentucky trade shows if you are present for more than 15 days within 12 months.

Economic Nexus

States have established regulations to collect sales tax from out-of-state sellers who meet certain revenue and/or transaction thresholds. This rule is known as economic nexus.

Beginning July 1, 2018, the threshold for economic nexus in Kentucky is $100,000 in gross revenue or 200 transactions in the previous or current calendar year’s sales.

While the nexus criteria mentioned above generally apply to most businesses, additional methods exist for establishing sales tax nexus. To access a comprehensive list of these rules, please refer to the governing laws for sales tax nexus requirements in Kentucky.

Kentucky Sales Tax on Goods and Services

One of the first things you need to know is whether the goods you’re selling or the services you’re offering are taxable in Kentucky.

Tangible Products

Almost all goods are taxable in Kentucky, including:

• Cosmetics
• Electronics
• Clothing
• Furniture
• Jewelry
• Home Goods
• Personal hygiene
• Diapers
• Feminine Hygiene Products – Products such as pads, tampons, and menstrual cups are still taxable in Kentucky.

The goods that are exempt from sales tax are:

• Groceries – Food and grocery items are generally exempt, but items such as tobacco, alcoholic beverages, candy, prepared food, dietary supplements, soft drinks, and food sold through vending machines are not exempt.
• Bottled Water
• Production Machinery – Items used for production and manufacturing are exempt from sales tax.
• Medical Drugs and Devices – Prescription drugs and other medical devices, such as prosthetics, are tax-exempt in Kentucky.
• Agricultural Supplies – Seeds, fertilizers, and machinery used directly in farming are exempt.

Services

In Kentucky, the majority of service-based transactions, such as janitorial services and landscaping, are subject to sales tax.

However, there are specific situations where certain services are exempt from sales tax, especially if gross receipts are under $6,000 for the first calendar year of operation, if sold after January 1, 2023. If sold before January 1, 2023, gross receipts from the sales should be less than $6,000 in calendar year 2021, for the following services to be exempt from sales tax. Those services include:

• Photography services
• Room rental and lodging services
• Dry cleaning services
• Marketing services
• Telemarketing services
• Polling services
• Website design, development, and hosting services
• Leisure, recreational, and athletic instructional services

Software-As-A-Service (SaaS)/Digital Products

SaaS is taxable in the state of Kentucky.

Digital products (i.e., ebooks, downloadable video content, mobile apps) are also taxable, with the exception of digital audio-visual work.

Shipping/Handling

When delivering a taxable product to a location in Kentucky chosen by the customer via postal service or a common carrier, shipping fees are not taxed; however, if the seller personally delivers the product, these shipping charges typically become taxable. Handling charges are always subject to tax without any exceptions. In cases where a seller charges a single amount for both shipping and handling, this total fee is taxable regardless of the delivery method.

Sales Tax Permits and Licenses in Kentucky

Now that you’ve got a handle on when sales tax nexus applies and which products are taxable in Kentucky, the next important step is getting your Kentucky Seller’s Permit, also known as a sales tax permit.

Seller’s Permit

You can register for a Sales and Use Tax Permit online through the Kentucky One Business Stop Portal or follow our detailed step-by-step guide for assistance.

Ensure you have specific information on hand when registering for a seller’s permit, including, but not limited to:

• Business Identification Information (name, address, phone number, email address)
• Business Entity Structure (sole proprietorship, partnership, corporation, LLC, etc.)
• Federal Employer Identification Number (EIN or FEIN)
• Owner/Partner/Officer Information
• Business Activity Details (description of products or services sold, sales volume, date of the first sale, or the expected start dates)

Registration fee

There is no fee to register for a sales tax permit.

Renewal 

In Kentucky, you don’t have to renew your sales tax permit.

Resale Certificate

A resale certificate is a document that allows businesses to buy products without paying sales tax on them, as long as they plan to resell those items to customers, who will then pay the tax. As a seller, you can also accept resale certificates from others looking to buy for resale.

In Kentucky, sellers use resale certificates to buy goods from their suppliers that they intend to resell. The issuance of the certificates is always done in good faith that the seller will report tax on the final sale of the items.

You can fill out Form 51A105 – Resale Certificate provided by the Kentucky Department of Revenue after you receive your sales tax permit. You can also fill out the Streamlined Sales and Use Tax Certificate of Exemption if you would like to get sales tax exemption for multiple states simultaneously. If you don’t want the hassle of registering, sign up for our all-inclusive service that includes sales tax registration.

Need help? Read our blog: How to Get a Kentucky Resale Certificate for your Business

Streamlined Sales Tax (SST)

The Streamlined Sales Tax (SST) is an initiative to simplify and standardize sales tax regulations across multiple states. Kentucky is a party to this program, meaning it follows the uniform rules and definitions established by SST.

Check with the Kentucky Department of Revenue for the most current information on Kentucky’s participation in the Streamlined Sales Tax initiative.

Calculating and Collecting Sales Tax in Kentucky

Sales Tax Computation

In Kentucky, the sales tax is made up of only the statewide sales tax. To figure out the total sales tax for your calculation, you’ll need to add up the rates for the state, county, and city (if applicable) where your transaction occurs. Use TaxHero’s Kentucky Sales Tax Calculator to compute sales tax.

Here’s an example. Suppose an out-of-state seller satisfies the economic nexus criteria in Kentucky and sells to a customer in Louisville, KY, with a ZIP code of 40214. In that case, the seller has to charge the customer a total sales tax, which can be broken down as follows:

SALES TAX FORMULA RATE State: Kentucky 6.00% County: Jefferson N/A District: Third District N/A City: Louisville N/A Combined Sales Tax Rate = 6.00%

Origin-based vs. Destination-based 

When making in-state sales, it is important to determine if you are located in an origin-based or a destination-based state to figure out what rate to charge for sales tax.

Kentucky is a destination-based state, meaning sales tax is determined based on the buyer’s location. That means for a Kentucky-based seller, sales tax is generally based on the location of the buyer when selling within the state.

For out-of-state or remote sellers, the sales tax rate is always determined by the buyer’s location. For instance, if you’re selling a product from California to a customer in Louisville, Kentucky, where you have nexus, you’d apply Louisville’s sales tax rate to that sale.

To make life easier, consider using sales tax software or consulting a tax professional, like TaxHero, to ensure accurate tax calculations and collections. Understanding these tax rules helps you stay compliant, whether you’re in-state or out-of-state.

Filing and Remitting Sales Tax Returns in Kentucky

The next step after collection is filing and remitting your Kentucky sales tax returns. Filing and remittance can vary in frequency, typically monthly, quarterly, or annually.

It’s crucial to keep accurate records of your sales and tax collections and adhere to the filing schedule set by the state to remain compliant with Kentucky’s sales tax regulations.

Due Dates 

In Kentucky, the due date falls on the 20th day of the following month. For instance, sales tax collected in January is due by February 20th for monthly filers.

However, if this day is a holiday, weekend, or in the rare occurrence of a natural disaster, the deadline is typically extended to the next business day. For instance, if you’re a monthly filer and filing sales tax for April, and the May 20th deadline falls on a holiday or weekend, you’ll have until May 21st, the following business day, to submit.

Filing Sales Tax Returns

To file your sales tax return for Kentucky, a few options are available:

1. File online through the Kentucky Business One Stop Portal.
2. File with TaxHero – Let TaxHero take care of it so you don’t have to worry about missing a payment or return.

Timely Filing Discount

Some states offer a discount to businesses for collecting, filing, and remitting sales tax on time as an incentive to process sales taxes promptly. Kentucky’s timely filing discount amount is a 1.75% discount on the first $1,000 and a 1.50% discount on any additional amount without exceeding $50 per month.

Sales Tax Holiday

Kentucky Sales Tax Penalties

Like in most states, sales tax is a big part of how Kentucky generates revenue. Thus, maintaining compliance with sales tax regulations is of utmost importance. Failure to do so can lead to consequences and sales tax penalties. Therefore, it is crucial to always ensure you are up-to-date in filing, collecting, and remitting sales tax to the state.

Here are the specific penalties for non-compliance with sales tax regulations in Kentucky:

• Civil penalties amounting to 2% of the total tax due for every 30 days or fraction thereof that a payment is late. A maximum penalty of 20% for tax not timely withheld, collected, or paid. The minimum penalty is $10.
• On the criminal side, offenses can be classified as felonies, depending on the severity and specific circumstances.

Sales Tax Nexus in South Carolina

Physical Nexus

1. Physical Location: This includes having an office, a place for distribution, sales, or showcasing products, a warehouse or storage facility, or any other place where you conduct business. 
2. Inventory in the State: This covers situations where you store your products within the state, even if it’s done through a third-party fulfillment center or 3PL (like Amazon FBA) or an online marketplace.
3. Employees, independent contractors, agents, or other representatives operating on your behalf.
4. Affiliate Nexus or Click-through Nexus: A business has nexus in South Carolina if it works with a company in the state that sells goods or services. This connection happens if: (i) the South Carolina company sells similar items and shares brand names, trademarks, or logos with the business, or (ii) the business relies on the South Carolina partner for handling returns, taking orders, customer support, or distributing ads.
5. Presence at Trade Show: In South Carolina, events are classified as either Special Events (like fairs or festivals with admission fees) or Retail Events. Vendors selling at Special Events more than once in 24 months need a South Carolina Retail License. Those selling only once within 24 months don’t need the license but must submit the Special Event Return (FC-1) and Affidavit (FS-152)
6. When a business uses its own vehicles, employs representatives, or uses methods other than common carriers or the US Postal Service for in-state delivery.

Economic Nexus

South Carolina Sales Tax on Goods and Services

Tangible Products

• Cosmetics
• Electronics
• Clothing
• Furniture
• Jewelry 
• Home Goods

• Groceries – Sales of unprepared food that can be bought with USDA food coupons are not subject to state sales tax. But, this doesn’t always apply to local taxes unless local laws exempt these sales.
• Prescription Medications – SC Revenue Ruling #11-3 are exempt from sales and use tax, including medications for preventing respiratory syncytial virus, treating rheumatoid arthritis, cancer, lymphoma, leukemia, and items dispensed by a licensed pharmacist for intravenous drug administration. Other exempt goods under the ruling include prosthetic devices, diabetic supplies, and other medical supplies.
• Feminine Hygiene Products (i.e., pads, tampons, and menstrual cups), Diapers, and Toilet Papers
• School and Library Books – Printed Form or Alternative Forms
• Agricultural Supplies: Seeds, fertilizers, and machinery used directly in farming are exempt.

Services

• Communications 
• Laundry and cleaning services
• Accommodations
• Electricity

Software-As-A-Service (SaaS)/Digital Products

Shipping/Handling

Sales Tax Permits and Licenses in South Carolina

Seller’s Permit

• Business Identification Information (name, address, phone number, email address)
• Business Entity Structure (sole proprietorship, partnership, corporation, LLC, etc.)
• Federal Employer Identification Number (EIN or FEIN)
• Owner/Partner/Officer Information
• Business Activity Details (description of products or services sold, sales volume, date of the first sale, or the expected start dates)

Resale Certificate

Streamlined Sales Tax (SST)

Calculating and Collecting Sales Tax in South Carolina

Sales Tax Computation

SALES TAX FORMULA RATE State: South Carolina 6.00% County: Charleston 0.00% District: First District 2.00% City: Charleston 1.00% Combined Sales Tax Rate = 9.00%

Origin-based vs. Destination-based 

Filing and Remitting Sales Tax Returns in South Carolina

Due Dates 

Filing Sales Tax Returns

1. File online through MyDORWAY.
2. Mail your Schedule of Local Taxes (ST-389) with the State Sales & Use Tax Return (ST-3) to SCDOR, PO Box 100193, Columbia, SC 29202 for balances due, or PO Box 125, Columbia, SC 29214-0101 for zero due, if your tax liability is under $15,000.
3. File with TaxHero – Let TaxHero take care of it so you don’t have to worry about missing a payment or return. 

Timely Filing Discount

Sales Tax Holiday

• Tax Free Weekend (Dates to be Announced): Various school-related items, including school supplies, clothing and footwear, computers and software, clothing accessories, and specific bed and bath items. 

South Carolina Sales Tax Penalties

• If you don’t file a sales tax return in South Carolina and you’re registered to collect sales tax, you face a 5% fine of the tax due for being up to one month late.
• Each additional month you’re late increases the fine by 5%, with a maximum penalty of 25%.
• Filing the return on time but paying late results in a 0.5% penalty of the unpaid tax for each month the payment is late.

Sales Tax Nexus in Wyoming

Physical Nexus

1. Physical Location: This includes having an office, a place for distribution, sales, or showcasing products, a warehouse or storage facility, or any other place where you conduct business.
2. Inventory in the State: This covers situations where you store your products within the state, even if it’s done through a third-party fulfillment center or 3PL (like Amazon FBA) or an online marketplace.
3. Employees, independent contractors, agents, or other representatives operating on your behalf.
4. Affiliate Nexus: An out-of-state seller without a physical presence in Wyoming may still have a nexus if the seller has an affiliate. This applies to affiliates with a physical presence in Wyoming who act on behalf of the seller.
5. Presence at Trade Shows: You must collect sales tax if you exhibit at more than four Wyoming trade shows in 12 months. Once you establish a nexus and obtain a license, sales tax applies to all sales in Wyoming, including those outside trade shows.

Economic Nexus

Wyoming Sales Tax on Goods and Services

Tangible Products

• Cosmetics
• Electronics
• Clothing
• Furniture
• Jewelry 
• Home Goods
• Personal Hygiene – Grooming and other hygiene products, such as soap or cleaning solutions, are taxable.

• Groceries – Under Wyoming’s Food and Nutrition Act of 2008, food items with supplemental nutrition assistance benefits are exempt from sales tax. This includes food items purchased for domestic home consumption and groceries purchased with food stamps. However, alcoholic beverages and prepared food are taxable.
• Diapers – for both children and adult diapers
• Feminine Hygiene Products (i.e., pads, tampons, and menstrual cups)
• School annuals and newspapers
• Prescription Medication
• Medical Devices – Exemptions do not apply to non-prescribed durable medical equipment
• Retail sales of trucks, trailers, and semitrailers, including leases of motor vehicles
• Agricultural Supplies: Seeds, fertilizers, and machinery used directly in farming

Services

• Telecommunications services
• Laundry, dry cleaning, or pressing
• Lodging service for transient guests
• Intrastate transportation of passengers
• Repairing, changing, or improving tangible personal property
• Utility services such as gas, electricity, or heat for domestic, industrial, and commercial consumption

Software as a Service (SaaS)/Digital Products

Shipping/Handling

Sales Tax Permits and Licenses in Wyoming

Seller’s Permit

• Business Identification Information: Legal Business Name, Physical Address, Mailing Address
• Business Entity Structure (i.e., Sole Proprietorship, Partnership, Subchapter S Corp., Corporation, LLC, etc.)
• Federal Employer Identification Number (EIN or FEIN)
• Name, Address, and SSN of Owners, Partners, or Officers
• Business Activity Details: Date & State of Incorporation, Start Date with the State of Wyoming (Nexus Start Date), Month of Fiscal Year End, Estimated Monthly Sales Volume)
• NAICS code

Resale Certificate

Streamlined Sales Tax (SST)

Calculating and Collecting Sales Tax in Wyoming

Sales Tax Computation

SALES TAX FORMULA RATE State: Wyoming 4.00% County: Laramie County 2.00% District: First District 0.00% City: Cheyenne 0.00% Combined Sales Tax Rate = 6.00%

Origin-based vs. Destination-Based

Filing and Remitting Sales Tax Returns in Wyoming

• Monthly Filing: Required if the average monthly liability is greater than $150.
• Quarterly Filing: Needed when the average monthly liability is between $50 and $150.
• Annual Filing: Mandatory if the average monthly liability is less than $50.

Due Dates

Filing Sales Tax Returns

1. File online through the Wyoming Internet Filing System for Business (WYIFS).
2. File by mail by filling out the Form 41-1 for monthly and quarterly filers or Form 42-1 for annual filers.
3. File with TaxHero – Let TaxHero take care of it so you don’t have to worry about missing a payment or return. 

Timely Filing Discount

Sales Tax Holiday

Wyoming Sales Tax Penalties

• Late Filing Penalty: $10 penalty for failing to file a sales tax return by the due date. This penalty is imposed 30 days after receiving the first notice from the state of Wyoming. A $25 penalty is applied when a seller fails to file a return within the 30-day notice.
• Inaccurate Filing Penalty: An incorrect calculation without fraudulent intent leads to a 10% penalty of the missing sales tax with interest. Any fraudulent, inaccurate filing with the intent of tax evasion results in a 25% penalty of the unreported sales tax with added interest.
• Fraudulent Tax Collection: Sellers who falsely collect excessive sales tax and fail to remit the accurate amount to the state of Wyoming are deemed guilty of a misdemeanor. This applies if the total amount they collected is less than $500, resulting in a $750 fine. If the collected amount exceeds $500, the criminal offense is raised to a felony charge with a $5,000 fine.
• General Violations: Any violation of sales tax laws without any specific penalty is automatically guilty of a misdemeanor. Other charges may be applicable depending on the committed offense.

Alabama, often referred to as the “Heart of Dixie,” is celebrated for its rich history and vibrant culture, from the bustling streets of Birmingham to the tranquil Gulf Shores. Yet, for businesses operating within this state, understanding the nuances of sales tax in Alabama is as crucial as understanding its diverse economic landscape.

This guide breaks down everything you need to know about Alabama’s sales tax, from determining the right sales tax rates to understanding exemptions and filing processes. By the end of this comprehensive guide, you’ll be equipped to handle Alabama’s sales tax with confidence and ease.

Sales Tax Nexus in Alabama

When a business creates either a physical or economic nexus, it is required to collect sales tax in Alabama.

Physical Nexus

A physical nexus means having a significant physical presence or engaging in enough activities within a state to require the collection and payment of sales tax. The factors that determine a physical nexus in Alabama include:

1. Physical Location: This includes having an office, a place for distribution, sales, or showcasing products, a warehouse or storage facility, or any other place where you conduct business.
2. Inventory in the State: This covers situations where you store your products within the state, even if it’s done through a third-party fulfillment center or 3PL (like Amazon FBA) or an online marketplace.
3. Employees, independent contractors, agents, or other representatives operating on your behalf.
4. Affiliate Nexus: You could trigger a physical nexus if you have affiliates, whether they operate online or in person, who maintain one or more locations within Alabama.
5. Receive orders from Alabama consumers by using Alabama-based broadcasters or publishers to share your advertising. Generate sales of physical products through frequent and significant mail campaigns, especially if your business gains from services like banking, financing, debt collection, telecommunications, or marketing happening in Alabama.
6. Deliver physical products within the state using vehicles the seller owns.
7. Presence at Trade Show: If you attended as a customer or took orders at a trade show, you must collect sales tax at Alabama trade shows.

Economic Nexus

States have established regulations to collect sales tax from out-of-state sellers who meet certain revenue and/or transaction thresholds. This rule is known as economic nexus.

Beginning October 1, 2018, the threshold for economic nexus in Alabama is $250,000 in gross revenue in the previous calendar year’s sales.

While the nexus criteria mentioned above generally apply to most businesses, additional methods exist for establishing sales tax nexus. To access a comprehensive list of these rules, please refer to the governing laws for sales tax nexus requirements in Alabama.

Alabama Sales Tax on Goods and Services

One of the first things you need to know is whether the goods you’re selling or the services you’re offering are taxable in Alabama.

Tangible Products

Almost all goods are taxable in Alabama, including:

• Cosmetics
• Electronics
• Clothing
• Furniture
• Jewelry
• Home Goods
• Cigarettes and Beers
• Groceries – Foods that qualify for the Supplemental Nutrition Assistance Program (SNAP) are taxed at a lower rate of 2.00% starting September 1, 2025. Before that, groceries were taxed at 3% in Alabama. SNAP-eligible foods include most items for home consumption besides alcohol, tobacco, hot foods, or hot food products ready to eat immediately.

The goods that are exempt from sales tax are:

• Prescription Medications
• Gasoline and Motor Oil
• Agricultural Supplies – Fertilizers, insecticides, and fungicides used for farming are exempt; this includes seeds for planting.
• Feminine Hygiene Products – Beginning September 1, 2025, feminine hygiene products such as sanitary pads, tampons, menstrual sponges, menstrual cups, or other similar feminine hygiene products are temporarily exempt from sales tax in Alabama. This rule is in effect until August 31, 2028.
• Diapers and Baby Products – Products such as baby formula, baby bottles, baby wipes, breast milk pumping equipment, breast pumps, diapers, and maternity clothing are temporarily exempt from sales tax starting September 1, 2025. This temporary exemption shall be lifted by August 31, 2028.
• Poultry products

Services

In Alabama, all service-based transactions, such as professional services, advertising, and cleaning services, are not subject to sales tax. However, if a service is performed as part of manufacturing or creating a new tangible item that will later be sold, sales tax may apply to that service, even if the charges for the service are listed separately from the sale price of the item.

Software-As-A-Service (SaaS)/Digital Products

SaaS is taxable in the state of Alabama.

Digital products (i.e., ebooks, downloadable video content, computer software, mobile apps) are also taxable.

Shipping/Handling

Shipping and handling charges in Alabama are taxable if the delivery was made by the seller’s own vehicle or in a leased vehicle. However, if the delivery is made by a common carrier or the U.S. postal service and billed as a separate item and paid directly or indirectly by the buyer, it is not taxable.

Sales Tax Permits and Licenses in Alabama

Now that you’ve got a handle on when sales tax nexus applies and which products are taxable in Alabama, the next important step is getting your Alabama Seller’s Permit, also known as a sales tax permit.

Seller’s Permit

You can register for a Sellers Use Tax online through the My Alabama Taxes or follow our detailed step-by-step guide for assistance.

Ensure you have specific information on hand when registering for a seller’s permit, including, but not limited to:

• Business Identification Information (name, address, phone number, email address)
• Business Entity Structure (sole proprietorship, partnership, corporation, LLC, etc.)
• Federal Employer Identification Number (EIN or FEIN)
• Owner/Partner/Officer Information
• Business Activity Details (description of products or services sold, sales volume, date of the first sale, or the expected date to start date)

Registration fee

There is no fee to register for a sales tax permit.

Renewal

In Alabama, you must renew your sales tax permit annually through your My Alabama Taxes account.

Resale Certificate

A resale certificate is a document that allows businesses to buy products without paying sales tax on them, as long as they plan to resell those items to customers, who will then pay the tax. As a seller, you can also accept resale certificates from others looking to buy for resale.

In Alabama, sellers use resale certificates to buy goods from their suppliers that they intend to resell. The issuance of the certificates is always done in good faith that the seller will report tax on the final sale of the items.

You can fill out the Form ST-EX A1 Application for Sales Tax Certificate of Exemption provided by the Alabama Department of Revenue after you receive your sales tax permit. If you don’t want the hassle of registering, sign up for our all-inclusive service that includes sales tax registration.

Need help? Read our blog: How to Get an Alabama Resale Certificate for your Business

Streamlined Sales Tax (SST)

The Streamlined Sales Tax (SST) is an initiative to simplify and standardize sales tax regulations across multiple states. However, Alabama is not a party to this program as it’s only an advisory state, meaning it does not follow the uniform rules and definitions established by SST but has its own sales tax regulations.

Check with the Alabama Department of Revenue for the most current information on Alabama’s participation in the Streamlined Sales Tax initiative.

Calculating and Collecting Sales Tax in Alabama

Sales Tax Computation

In Alabama, sales tax isn’t just one simple rate; it’s a combination of state and local taxes, with eligible out-of-state or remote sellers having to apply first before they can start reporting, paying, and collecting the 8.00% use tax rate, different from the normal sales tax rate.

To figure out the total sales tax for your calculation, you’ll need to add up the rates for the state, county, and city (if applicable) where your transaction occurs. Use TaxHero’s Alabama Sales Tax Calculator to compute sales tax.

Here’s an example. Suppose an out-of-state seller satisfies the economic nexus criteria in Texas and sells to a customer in Huntsville, AL, with a ZIP code of 35808. In that case, the seller has to charge the customer a total sales tax, which can be broken down as follows:

SALES TAX FORMULA RATE State: Alabama 4.00% County: Madison 1.50% District: Fifth 0.00% City: Huntsville 0.00% Combined Sales Tax Rate = 5.50%

* includes 1.00% Madison County Special Tax Rate

Origin-based vs. Destination-based

When making in-state sales, it is important to determine if you are located in an origin-based or destination-based state to figure out what rate to charge for sales tax.

Alabama is a destination-based state, meaning sales tax is determined based on the buyer’s location. That means for an Alabama-based seller, sales tax is generally based on the location of the buyer when selling within the state.

For eligible out-of-state or remote sellers with economic nexus in Alabama, they must apply and be accepted first before they can start collecting the 8.00% seller’s use tax rate. For instance, if you’re selling a product from Texas to a customer in Huntsville, Alabama, where you have nexus, you’d have to apply Huntsville’s sales tax rate to that sale.

To make life easier, consider using sales tax software or consulting a tax professional, like TaxHero, to ensure accurate tax calculations and collections. Understanding these tax rules helps you stay compliant, whether you’re in-state or out-of-state.

Filing and Remitting Sales Tax Returns in Alabama

The next step after collection is filing and remitting your Alabama sales tax returns. Filing and remittance can vary in frequency, typically monthly, quarterly, bi-annually, or annually. By default, all businesses are required to file sales tax returns monthly. However:

• Quarterly filing: If you have an annual sales tax liability of less than $2,400 in the previous year;
• Bi-Annual Filing: If your annual sales tax liability was less than $1,200 in the previous year, or you only made sales during two separate periods of up to 30 days each;
• Annual Filing: If you have an annual sales tax liability of less than $600.

It’s crucial to keep accurate records of your sales and tax collections and adhere to the filing schedule set by the state to remain compliant with Alabama’s sales tax regulations.

Due Dates

In Alabama, the due date falls on the 20th day of the following month. For instance, sales tax collected in January is due by February 20th for monthly filers.

However, if this day is a holiday, weekend, or in the rare occurrence of a natural disaster, the deadline is typically extended to the next business day. For instance, if you’re a monthly filer and filing sales tax for April, and the May 20th deadline falls on a holiday or weekend, you’ll have until May 21st, the following business day, to submit.

Filing Sales Tax Returns

To file your sales tax return for Alabama, a few options are available:

1. File online through the My Alabama Taxes website.
2. File with TaxHero – Let TaxHero take care of it so you don’t have to worry about missing a payment or return.

Timely Filing Discount

Some states offer a discount to businesses for collecting, filing, and remitting sales tax on time as an incentive to process sales taxes promptly. Alabama’s timely filing discount is a 2% discount for the first $400,000 of sales taxes collected and repeated, with the discount not exceeding $8,000 per month.

Sales Tax Holiday

• Emergency Preparedness: Starts on Friday of the last full weekend in February until Sunday midnight. Exempt goods are weather preparedness items worth $94 or less/item, including (but not limited to):
  • Batteries
  • Smoke detector
  • Fuel container
  • Fire extinguisher
  • Portable generator ($1,564 or less)
• Back-to-School: Begins every third Friday of July and ends on the following Sunday by midnight. Exempt goods are:
• • Computers, software, and computer supplies ($750 or less)
  • School supplies ($78 or less/item)
  • Books ($47 or less/item)
  • Clothing ($156 or less/item)

Alabama Sales Tax Penalties

Like in most states, sales tax is a big part of how Alabama generates revenue. Thus, maintaining compliance with sales tax regulations is of utmost importance. Failure to do so can lead to consequences and sales tax penalties. Therefore, it is crucial to always ensure you are up-to-date in filing, collecting, and remitting sales tax to the state.

Here are the specific penalties for non-compliance with sales tax regulations in Alabama:

• Civil penalties amounting to the greater of 10% of the total sales tax due or $50;
• On the criminal side, offenses can be classified as either misdemeanors or felonies, depending on the severity and specific circumstances.

In the heart of America, Indiana blends the charm of its basketball legacy and lush farmlands with a robust business environment. Yet, navigating its economic landscape is a unique challenge, especially in understanding sales tax in Indiana and its laws. This knowledge is essential for thriving amidst the vibrant and diverse economic fabric of the Hoosier State.

This guide breaks down everything you need to know about Indiana’s sales tax, from determining the right sales tax rates to understanding exemptions and filing processes. By the end of this comprehensive guide, you’ll be equipped to handle Indiana’s sales tax with confidence and ease.

Sales Tax Nexus in Indiana

When a business creates either a physical or economic nexus, it is required to collect sales tax in Indiana.

Physical Nexus

A physical nexus means having a significant physical presence or engaging in enough activities within a state to require the collection and payment of sales tax. The factors that determine a physical nexus in Indiana include:

1. Physical Location: This includes having an office, a place for distribution, sales, or showcasing products, a warehouse or storage facility, or any other place where you conduct business.
2. Inventory in the State: This covers situations where you store your products within the state, even if it’s done through a third-party fulfillment center or 3PL (like Amazon FBA) or an online marketplace.
3. Employees, independent contractors, agents, or other representatives operating on your behalf.
4. Presence at Trade Show: An out-of-state retailer must collect sales taxes in Indiana if they display their products at a trade show or convention. However, merely being present without showcasing products in Indiana at conventions or trade shows doesn’t require you to collect sales tax in Indiana.
5. Delivery of goods into Indiana by the seller’s truck, where title and possession transfer in Indiana.

Economic Nexus

States have established regulations to collect sales tax from out-of-state sellers who meet certain revenue and/or transaction thresholds. This rule is known as economic nexus.

Starting January 1, 2024, Indiana will only have a $100,000 threshold for sales tax nexus. If a merchant meets the 200 transaction threshold in 2023 but not the $100,000 threshold, they may close their sales tax account in 2024 if they do not have $100,000 in sales in 2024. However, they will still have to file all required sales tax returns for 2024.

It should be noted that while the nexus criteria mentioned above generally apply to most businesses, additional methods are available for establishing sales tax nexus. To access a comprehensive list of these rules, please refer to the governing laws for economic sales tax nexus requirements in Indiana.

Indiana Sales Tax on Goods and Services

One of the first things you need to know is whether the goods you’re selling or the services you’re offering are taxable in Indiana.

Tangible Products

Almost all goods are taxable in Indiana, including:

• Cosmetics
• Electronics
• Clothing
• Furniture
• Jewelry
• Home Goods

The goods that are exempt from sales tax are:

• Groceries: Sales of food and food ingredients intended for human consumption are generally exempt from sales tax. However, this exemption does not apply to tobacco, alcoholic beverages, candy, dietary supplements, or soft drinks.
• Diapers
• Feminine Hygiene Products (i.e., pads, tampons, and menstrual cups)
• Prescription Medications
• Medical Devices
• Agricultural Supplies: Seeds, fertilizers, and machinery used directly in farming are exempt

For the latest updates and detailed information on sales tax in Indiana, you can visit the Sales Tax Information Bulletins, which provide current guidelines and bulletins.

Services

In Indiana, the majority of all service-based transactions, such as professional services, advertising, and cleaning services, are not subject to sales tax.

However, there are specific situations where certain services are taxable. For instance, a few taxable services are:

• Rental of Tangible Personal Property
• Services that result in tangible personal property (i.e., designing and selling a custom jewelry piece)
• Room And Lodging Rental For Less Than 30 Days
• Framing Services
• Water Softening and Conditioning 

Software-As-A-Service (SaaS)/Digital Products

SaaS (i.e., computer software) is not taxable in the state of Indiana.

Digital products (i.e., ebooks, downloadable video content, mobile apps) are taxable only when the seller gives the buyer the right to use them permanently without requiring ongoing payments.

Shipping/Handling

Shipping and handling charges in the state of Indiana are taxable. Sales tax is exempt if delivery charges are billed and furnished by a third party.

Sales Tax Permits and Licenses in Indiana

Now that you’ve got a handle on when sales tax nexus applies and which products are taxable in Indiana, the next important step is getting your Indiana Seller’s Permit, also known as a sales tax permit.

Seller’s Permit

You can register for a Retail Merchant Certificate online through the Indiana Business Roadmap (INBiz) or follow our detailed step-by-step guide for assistance.

Ensure you have specific information on hand when registering for a seller’s permit, including, but not limited to:

• Business Identification Information (name, address, phone number, email address)
• Business Entity Structure (sole proprietorship, partnership, corporation, LLC, etc.)
• Federal Employer Identification Number (EIN or FEIN)
• Owner/Partner/Officer Information
• Business Activity Details (description of products or services sold, sales volume, date of the first sale, or the expected date to start date)

Registration fee

Renewal

Resale Certificate

A resale certificate is a document that allows businesses to buy products without paying sales tax on them, as long as they plan to resell those items to customers, who will then pay the tax. As a seller, you can also accept resale certificates from others looking to buy for resale.

In Indiana, sellers use resale certificates to buy goods from their suppliers that they intend to resell. The issuance of the certificates is always done in good faith that the seller will report tax on the final sale of the items.

You can fill out the General Sales Tax Exemption Certificate Form ST-105 provided by Indiana if you have a sales tax permit in the state after you receive your sales tax permit. You can also fill out the Streamlined Sales and Use Tax Certificate of Exemption if you would like to get sales tax exemption for multiple states simultaneously. If you don’t want the hassle of registering, sign up for our all-inclusive service that includes sales tax registration.

Need help? Read our blog: How to Get an Indiana Resale Certificate for your Business

Streamlined Sales Tax (SST)

The Streamlined Sales Tax (SST) is an initiative to simplify and standardize sales tax regulations across multiple states. Indiana is a party to this program, meaning it follows the uniform rules and definitions established by SST.

Check with the Indiana Department of Revenue for the most current information on Indiana’s participation in the Streamlined Sales Tax initiative.

Calculating and Collecting Sales Tax in Indiana

Sales Tax Computation

To determine the total sales tax for your calculation, you’ll only need to consider the state sales tax rate, as there are no additional county or city rates applicable for the state of Indiana. Use TaxHero’s Indiana Sales Tax Calculator to compute sales tax.

Here’s an example. Suppose an out-of-state seller satisfies the economic nexus criteria in Indiana and sells to a customer in Indianapolis, IN, with a ZIP code of 46204. In that case, the seller has to charge the customer a total sales tax, which can be broken down as follows:

SALES TAX FORMULA RATE State: Indiana 7.00% County: Marion N/A District: Seventh District N/A City: Indianapolis N/A Combined Sales Tax Rate = 7.00%

Origin-based vs. Destination-based

When making in-state sales, it is important to determine if you are located in an origin-based or a destination-based state to figure out what rate to charge for sales tax.

Indiana is destination-based, meaning sales tax is determined based on the seller’s location. That means for an Indiana-based seller, sales tax is generally based on the location of the seller when selling within the state.

For out-of-state or remote sellers, the sales tax rate is always determined by the buyer’s location. For instance, if you’re selling a product from Ohio to a customer in Indianapolis, Indiana, where you have Nexus, you’d apply Indianapolis’s sales tax rate to that sale.

To make life easier, consider using sales tax software or consulting a tax professional, like TaxHero, to ensure accurate tax calculations and collections. Understanding these tax rules helps you stay compliant, whether you’re in-state or out-of-state.

Filing and Remitting Sales Tax Returns in Indiana

The next step after collection is filing and remitting your Indiana sales tax returns. Filing and remittance can vary in frequency, typically monthly or annually.

It’s crucial to keep accurate records of your sales and tax collections and adhere to the filing schedule set by the state to remain compliant with Indiana’s sales tax regulations.

Due Dates

In Indiana, the due date for sales tax varies. Monthly filers must submit by the 20th of the month following the reporting period if their average monthly sales and use tax liability exceeded $1,000 in the previous year or if filing a combined sales/withholding tax return.

If the liability did not exceed $1,000, the due date is the 30th of the month following the reporting period. For annual filers, the due date is the last day of the month following the reporting period.

However, if this day is a holiday, weekend, or in the rare occurrence of a natural disaster, the deadline is typically extended to the next business day. For instance, if you’re a monthly filer and filing sales tax for April, and the May 20 deadline falls on a holiday or weekend, you’ll have until May 21st, the following business day, to submit.

Filing Sales Tax Returns

To file your sales tax return for Indiana, a few options are available:

1. File online through INTIME.
2. File with TaxHero – Let TaxHero take care of it so you don’t have to worry about missing a payment or return. 

Timely Filing Discount

Some states offer a discount to businesses for collecting, filing, and remitting sales taxes on time as an incentive to process them promptly. Indiana’s timely filing discount amount is 1% of sales tax collected.

Sales Tax Holiday

Indiana Sales Tax Penalties

Like in most states, sales tax is a big part of how Indiana generates revenue. Thus, maintaining compliance with sales tax regulations is of utmost importance. Failure to do so can lead to consequences and sales tax penalties. Therefore, it is crucial to always ensure you are up-to-date in filing, collecting, and remitting sales tax to the state.

Here are the specific penalties for non-compliance with sales tax regulations in Indiana:

• Not paying tax: Penalty of 10% of the owed tax or $5, whichever is more. This applies to payments that should be made electronically but aren’t.
• Not filing a tax return, with the Department preparing it: 20% penalty.
• Not filing a tax return with intent to avoid tax: 100% penalty.
• Bad checks: A flat fee of $35.
• Not filing an information return: $10 penalty for each missed filing, up to $25,000 annually. This includes failing to file electronically when required.
• Not filing a corporate or partnership tax return with zero tax: $10 per day late fee, up to $250. Plus, there is an extra $10 penalty for each late Schedule K1 information return.