What you need to know
In the United States, Sales tax is a consumption tax charged at the point of purchase for certain goods and services. It's managed at the state level, and it's interesting to note that not all states require sales tax. Rates can vary from one state to another, and many local jurisdictions like cities and counties might add their own extra bit on top of the state tax.
Unfortunately, at Collective, we’re not equipped to manage sales tax for our members, so we can't verify the accuracy of your books in relation to sales tax. However, you can always rely on your own records to determine how much sales tax you owe. If you need expert help, companies like TaxJar and Avalara are great resources for sales tax advice, calculations, and filing.
How to manage your sales taxes
Here’s what you need to keep on your radar:
Assessing Tax Responsibility: First up, you'll need to figure out if the sales you make are subject to sales tax.
Filing Returns: If they are, you're responsible for filing the necessary sales tax returns with the right states.
Collecting and Paying Tax: Make sure you’re collecting the appropriate amount of sales tax from your customers and then passing it on to the relevant tax authorities.
Collective cannot provide any assurance regarding the accuracy of your books with respect to sales tax, and you should refer to your own records when calculating the sales tax you may owe. TaxJar and Avalara are examples of companies that will advise you on sales tax, calculate sales tax for you, and file sales tax returns for you.
What Collective Will Do
If you would like for your books to reflect your sales tax liability balance on a quarterly basis, you can send the quarterly ending balance to Collective by emailing [email protected] and we will update your books to reflect your sales tax liability. If some of your sales are subject to sales tax, and you choose not to provide this balance to Collective, bear in mind that some portion of the customer deposits reported on your profit and loss statement may be inclusive of sales tax.
Disclaimer: The information contained in this document is provided for informational purposes only and should not be construed as financial or tax advice. It is not intended to be a substitute for obtaining accounting or other financial advice from an appropriate financial adviser or for the purpose of avoiding U.S. Federal, state or local tax payments and penalties.