How to file sales tax returns in the US

To ensure your business stays tax compliant, you must first understand where you have an obligation to collect tax on your sales and comply with economic nexus laws. Then, you need to follow the sales tax registration process with the appropriate taxing authority; calculate and collect the right amount of tax from your customers; and finally, file your return and remit the tax collected to the government.

Accurately preparing and filing your tax returns and remitting the tax collected can be complicated, as each US state and other local-level taxing authorities have different rules, such as how frequently you need to file, the type of information you need to provide, the form to use, how to submit your tax return and payment, and other administrative differences.

This guide provides in-depth information on filing sales tax returns in the US, including specific instructions for how to file in each US state with a state sales tax.

The basics of filing and remittance

Sales tax is a type of indirect tax. Indirect taxes apply to the sales of goods or services paid for by the customer to a business, which in turn has to pay the tax collected to the state or other local tax authority. This is why sales tax is often referred to as a “pass-through tax.” The tax moves from the customer or buyer to the seller, who then remits the tax collected to the taxing authority. It is important to remember that you, the business, are acting as an agent of the state or other local tax authority, meaning you are holding the funds from the tax collected on behalf of the taxing authority and must remit or pay the amount collected when you file your return. Filing is the act of submitting a sales tax return or report of your sales activity for a period, while remittance is submitting the tax collected to appropriate government entities.

In most situations, your tax payment (remittance) is due at the same time your tax returns and reports are due. Filing and remittance are often coupled together, but it’s important to keep in mind that they are two separate activities.

Your filing and remittance frequency is unique to your business and is set by the state or other local tax authority when you register to collect tax. High-volume businesses are often required to file more frequently than small businesses, so your frequency can change as your business grows.

Filing a sales tax return

Filing a return involves reporting in summary your sales transactions for the reporting period, including amounts you collected from your customers. A return, depending on the form requirements, details information including your gross sales, deductions including nontaxable and exempt sales, taxable sales, and the amount of tax collected. Reported amounts may also be required to be itemized by lower-level jurisdictions or by reporting location.

Each state or local tax authority determines the specific details, format, and frequency required for reporting and filing taxes. For example, some states in the US require businesses to report sales by city, county, or special taxing district when filing. There are other states that only require information at a consolidated or state level. Having accurate, detailed, and updated records is crucial for maintaining tax compliance and will be helpful when it is time to file a tax return, or in the event of an audit.

Key notes on filing

Remittance

While filing is reporting the tax that was collected, remittance is taking the tax collected and transferring it to the state or other local tax authority. Similar to filing, each tax authority mandates their own method and timing of remittance, which may vary depending on your volume of sales in that location. For example, in Connecticut, the frequency varies between monthly, quarterly, and yearly based on total tax liability. With a few exceptions, tax is commonly due with filing.

How to file and remit sales tax returns by state

To file and remit taxes, you need to submit returns to each taxing authority where you are registered and have collected taxes. Most areas require online submissions of tax returns and electronic payments, though some will allow businesses to physically mail their documents.

Alabama

The Alabama Department of Revenue requires that sellers file and remit sales tax online. You can file online at My Alabama Taxes (MAT). However, if you are remitting more than $750 in one payment, Alabama requires you to pay via electronic funds transfer (EFT) through My Alabama Taxes ONE SPOT.

Alaska

Arizona

Sellers have two options for filing and remitting their Arizona sales tax (referred to as the transaction privilege tax in Arizona):

Arkansas

Sellers have two options for filing and remitting their Arkansas sales tax:

California

Sellers have two options for filing their California sales tax:

Colorado

Sellers have two options for filing their Colorado sales tax:

Connecticut

District of Columbia

Sellers have two options for filing and remitting their Washington, DC sales tax: