In the United States, a sales tax is a consumption tax imposed on the sale of goods and services. Sales tax is governed at the state level, but not all states impose sales tax. Sales tax rates vary from state to state. Most states also allow a 'local option' that permits local jurisdictions, such as cities and counties, to impose an additional percentage on top of the state-level tax and to keep the related revenues. TaxJar and Avalara are examples of companies that can help you determine if you need to pay sales tax.
At this point in time, Collective does not support our members in this area. As a member at Collective, you are responsible for:
(a) determining whether any of your sales are subject to sales tax
(b) if applicable, filing the sales tax returns as required by the applicable state(s)
(c) collecting sales tax when appropriate and paying sales tax to the applicable agencies
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.