How To Pay Sales Tax For Small Businesses
To pay sales tax, you can go to your States Department of Revenue website. Some States may call it Department of Taxation and Finance or Department of Treasury.
For example, in the State of New York, it is Department of Revenue is called New York State Department of Finance and Taxation. Whereas, in Arizona the name changes to Arizona Department of Revenue and in Michigan, it is Michigan Department of Treasury. Each State may have different titles, however, once you search your local department of revenue the name should pop up.
Next, scroll down and search the Sales and Use Tax section. If its not readily available, enter sales tax in the search bar and it should direct you to the appropriate page. From there, youll need to create an account or log in to an existing account.
Finally, youll be able to input your business data and pay your sales tax online. You also have an option to print the form and mail it to the address provided on the form.
How Much Sales Tax Do I Need To Collect
If youre selling goods in one of the 45 states with sales tax, youre responsible for collecting and filing these taxes with your state government. This is a moving target, as the state tax rates fluctuate monthly.
State tax rates range from 0% all the way up to 7.25%. To determine the exact tax rate for a specific address in your state, this sales tax calculator looks up sales tax rates by address.
You might also be responsible for local sales tax. This is based on the city, county, or jurisdiction that you or your customer resides in. How do you know if you should charge based on the location of your business or your customer? That depends on whether you operate in an origin-based state or a destination-based state:
- Origin-based state: Sales tax rate is based on where your business is located
- Destination-based state: Sales tax rate is based on where your buyer is located
Origin-based states include Arizona, California , Illinois, Mississippi, Missouri, New Mexico, Ohio, Pennsylvania, Tennessee, Texas, Utah, and Virginia. All other states are destination-based, making it the more prevalent category by far.
Landscaping Lawn Care And Snow Removal
Education and training in landscaping, lawn care and snow removal can lead to a career in landscape architecture, groundskeeping, and tree trimming just to name a few.
Depending on what area you decide to specialize in, there may be other Ohio agencies that you will need to contact. For instance, if you are going to pursue a career in landscape architecture, you will need to be registered with the Ohio Board of Landscape Architects. If you will be selling hardy nursery stock , you must have a dealers license from the Ohio Department of Agriculture Division of Plant Industry. You may also need to contact this agency for information on pesticide and fertilizer regulation, if applicable. If you have questions or would like more detailed information, please contact the Ohio Department of Agriculture at 728-6270. Information is also online at www.ohioagriculture.gov/plant.
Landscaping, Lawn Care- Ohio Revised Code
OhioRevised Code Explained-Landscaping/ Lawn Care
Note: Gross Sales are the sum of all sales made during a specific period of time .
Snow Removal Service-Ohio Revised CodeThe Ohio Revised Code Section R.C. 5739.01 defines snow removal service as
. . . the removal of snow by any mechanized means, but does not include the providing of such service by a person that has less than five thousand dollars in sales of such service during the calendar year..
OhioRevised Code Explained-Snow Removal
Providing both Landscaping/ Lawn Care Service & Snow Removal
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What Is The Difference Between Self
The Colorado Department of Revenue collects sales taxes for the State, all statutory jurisdictions , plus the sales taxes for all special districts that assess a sales tax. State-collected jurisdictions include all special districts, 50 counties and approximately 150 municipalities, including 24 home-rule municipalities. There are two counties that self-collect and 72 municipalities that self-collect. Any self-collecting jurisdiction may opt-in to have the Colorado Department of Revenue administer, collect and audit sales tax for it.
In order to be state-collected the jurisdiction must conform to a prescribed list of exemption elections and conform to the State’s tax base. There may be local ordinance changes required, or other conforming actions necessary before the self-collected jurisdiction can qualify for the Colorado Department of Revenue to administer, collect and audit as a state-collected jurisdiction.
Services Subject Only To New York City Sales Tax Are:
- beautician services, barbering, and hair restoring
- massage services
- services provided by weight control and health salons, gymnasiums, Turkish and sauna baths, and similar facilities, including any charge for the use of these facilities
- written or oral credit rating services S, New York City Local Sales Tax on Credit Rating Services) and
- oral credit reporting services not delivered by telephone.
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Tax Exempt Property And Services
The chart below lists property and services that are generally exempt from sales tax. It also lists:
- Tax Law sections that provide the exemption
- department publications, bulletins, and technical memoranda that are relevant to the exemption and
- exemption documents, if any, that the customer must give to the seller for the sale to be treated as exempt from tax.
General sales tax exemption certificates
You should not collect sales tax on exempt sales that do not require an exemption document. However, for sales that require an exemption document, you must collect sales tax unless you receive a properly completed exemption document from the purchaser. You must receive the exemption document within 90 days of the date you delivered the property or rendered the service.
See Tax Bulletin Exemption Certificates for Sales Tax .
Special rules apply to contractors who provide maintenance and other services to real property. For more information, see Publication 862, Sales and Use Tax Classifications of Capital Improvements and Repairs to Real Property.
Local tax rates may apply and vary depending on the locality, including certain school districts. See Pub 718-R, Local Sales and Use Tax Rates on Residential Energy Sources and Services.
Medical equipment and supplies purchased by a person for use in performing medical services for compensation are subject to sales and use taxes.
How To Remit An Amount Owing
GST/HST payments that are $50,000 or more must be paid electronically or at your financial institution. You have to make arrangements with your Canadian financial institution when you make a payment of more than $25 million.
Electronic payments and paying at a Canadian financial institution
You can pay electronically using your Canadian financial institutions online or telephone banking services. You do not need a remittance voucher to pay online.
You can also pay electronically using the CRAs My Payment option. My Payment allows individuals and businesses to make payments online from an account at a participating Canadian financial institution, using the CRA website. For more information, go to My Payment.
You can make a payment at your Canadian financial institution for an amount owing on a return that has already been electronically filed using GST/HST NETFILE or GST/HST TELEFILE. However, you must include Form RC158, GST/HST NETFILE/TELEFILE Remittance Voucher, when making the payment.
If you are not filing electronically, you can file your return and make your payment at your participating financial institution in Canada.
If you are paying at a financial institution and your return requires attached documentation, you will have to send us these documents separately.
You cannot file your return at a financial institution if you are:
In these cases, you have to use one of the other filing methods described in this section.
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Bulk Shipments Not Individually Addressed And Not Sent By Mail Or Courier
You should not collect the GST/HST in advance on bulk shipments of publications that are not individually addressed such as those destined for resale through bookstores, and that are sent to Canada by any mode of transport other than mail or courier. CBSA will collect the GST/HST on these shipments whether or not it finds proof of your GST/HST registration. The importer of record, or agent, has to account for the publications on customs accounting documents and pay the appropriate amount of tax.
Itcs On Imports Into Canada
If you are an importer, you have to pay the GST or the federal part of the HST on most commercial goods you import into Canada, whether or not you are a GST/HST registrant. If you are a registrant, you can generally claim an ITC to recover the GST or the federal part of the HST paid or payable if the goods are imported for consumption use or supply in the course of your commercial activities.
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Overview Of Use Tax For Sellers Of Services
|What Is Use Tax?|
In Michigan, certain goods are subject to the 6% sales tax while certain services are subject to a 6% use tax that is imposed on the purchaser or consumer of services for the privilege of using that service in this State. A simultaneous obligation is imposed on the seller of the service to collect the 6% use tax from the purchaser and remit it to the State of Michigan. The purchaser/consumer is not relieved of responsibility for the tax until it has been paid to the State.
In some situations, a seller located outside Michigan may be excused by federal law from collecting Michigan’s 6% use tax, but that does not relieve the Michigan purchaser/consumer of their tax obligation. These situations often involve sales of services made or delivered over the Internet or by phone and catalog.
|Are All Transactions Subject to Use Tax?|
Michigan’s 6% use tax is applied to the purchase/sales price of a transaction in which taxable services are acquired. In some instances taxable and exempt property and/or services are combined into a single mixed transaction. When that situation occurs, the predominate nature of the transaction must be determined. The transaction will be either fully taxable or fully exempt: an all or nothing tax result.
|Where Is Use Tax Due?|
|What Services Are Subject To Use Tax?|
Effective April 1, 2009 use tax applies to the use or consumption of medical services provided by Medicaid managed care organizations.
|What Must a Seller Do?|
Registering And Remitting Us Sales Tax For Ecommerce Sellers
I operate and sell as a sole proprietor in the US. Do these rules apply to me?
Yes. Although sole proprietorship/partnerships are not considered to be distinct legal entities separate from its owners, they are still considered to be a business from the sales tax point of view .
How will state authorities know that I am selling to the customers in that state?
State authorities have the legal power to . This includes, but is not limited to:
With advancements in technology and digitization of accounting records, counterparties may provide required information to governments for a large number of eCommerce sellers in a matter of days. So the identification part is not as cumbersome and resource-consuming as it used to be.
What powers do individual states have?
A state department of revenue has virtually unlimited power to bring your eCommerce operations in the US to a complete halt. If the state authorities believe that your company should have registered and collected sales taxes, they have the power to impose an arbitrary notional assessment on your business.
I received a letter from the state of . Should I comply?
If you cooperate, some states will require you to register prospectively, which means that you wont be held liable for uncollected sales taxes from the prior period.
What about dropshipping by US suppliers?
How will I know when to register?
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How Place Of Supply Affects Gst/hst Rates
The rate of tax to charge depends on the place of supply. This is where you make your sale, lease, or other supply.
A zero-rated supply has a 0% GST/HST rate throughout all of Canada. For example, basic groceries are taxable at the rate of zero in every province and territory.
The rate for other taxable supplies depends on the province or territory. The current rates are:
- 5% in Alberta, British Columbia, Manitoba, Northwest Territories, Nunavut, Quebec, Saskatchewan, and Yukon
- 13% in Ontario
- 15% in New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island
See previous rates (from January 1, 2008 to September 30, 2016
For example, your store in Vancouver, B.C. delivers a mattress to your customer in Toronto, Ontario. You charge 13% HST on the sale because the place of supply is Ontario.
For detailed place-of-supply rules, see GST/HST rates and place-of-supply rules. Some supplies of products or services are GST/HST exempt.
To find out if your supply is taxable or exempt, see Type of supply.
If you supply a product or service to someone outside Canada, see GST/HST Imports and Exports.
How To Find Out What’s Taxable In Your State
You can search your state’s department of revenue to see if you can find specifics. If you are registered to collect sales tax in your state, you should be able to receive updates. Or, better yet, make a phone call.
The Federation of Tax Authorities has a list of all state revenue departments and state taxing authorities. They also have a list of state sales tax rates, including food and drug exemptions.
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Assignment Of Rights To The Rebate
You can assign your rights to a GST/HST rebate to your Canadian supplier of the goods, intangible property, or services if:
- you are not a GST/HST registrant
- you acquire the goods or services , to consume or use only for making or producing an original literary, musical, artistic, motion picture, or other work with copyright protection
- you are not a consumer of the goods or services and
- you manufacture or produce the work and all copies of it for export.
By assigning your rights to the rebate, you can, in effect, buy the goods, intangible property, or services free of the GST/HST. You will find an example of an assignment of rights agreement to the GST/HST rebate. You can use it, or design your own agreement. You have to give your supplier a copy of this assignment as documentation required to allow him or her to credit you the GST/HST payable.
Avoid Paying Sales Tax On Certain Items
Vendors who purchase products to resell can apply for a resale certificate. A resale certificate allows the business owner to buy certain products without paying sales tax on that product. The vendor then gets to charge the consumer the sales tax at the time of purchase. This way, the vendor doesnt endure the cost.
A resale certificate also applies to vendors who purchase items that theyll use to manufacture their products. For example, if a company buys wood from Home Depot to build a headboard for a client and sells that product to the client, it will be considered as a resale.
However, if a seller doesnt sell the product and uses it for personal use, it must be recorded. In which then, the seller must pay taxes on it.
Feel free to contact me via for services regarding applying for a resale certificate.
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Elimination Of The Gst/hst Rebate For Tour Packages Foreign Convention And Tour Incentive Program
A GST/HST rebate is generally no longer available to non-residents for the Canadian accommodation portion of eligible tour packages under the Foreign Convention and Tour Incentive Program if the accommodations are supplied after March 22, 2017. For more information, go to GST/HST rebate for tour packages.
Ies Other Than Individuals
Anyone who may fit into the category of partnership, trust, estate and even a corporation are considered to be persons other than individuals, which means that the GST rules are different. Goods and Services Tax applies to those who are:
- A permanent establishment
- A corporation if its incorporated or continued to run in Canada and not continued elsewhere
- Partnerships that are residents in Canada at that time
- Any labour union resident carrying on labour union activities
When there are residents that are considered to be non-residents based on any of these factors, they still may be considered as Canadian due to activities that are carried out through a permanent establishment. A permanent establishment is defined as:
- A fixed place of business through which they supply services, basic groceries or property
- A fixed place of business of someone else acting in Canada on their behalf to sell goods and services.
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Who Charges The Gst/hst
Generally, GST/HST registrants have to collect the GST/HST on all taxable supplies of property and services they provide to their customers. For more information, see Should you register?
In certain cases, you do not have to collect the GST/HST on a taxable sale of real property . Instead, the purchaser may have to pay the tax directly to us. For more information, see Guide RC4022, General Information for GST/HST Registrants.