How to set and collect sales taxes

atomicsirens

I'm not really sure how to properly ask this question so it makes sense, English is not my first language. I really don't know how to go about collecting sales tax from residents in my state, I'm in the process of making my own website but not really sure how to set the tax %, I tried searching on the internet but different counties and cities charge different % per tax. Do i have to personally charge them tax or can i just pay the sales tax to my state from the profit i make, example: someone from my state buys something for $20.00 and the tax is $1 but i don't charge them the tax, but when its time to send tax reports to the state can i just send them the $1 from the $20.00 i made as tax? Sorry if my question doesn't make much sense, thank you.

irene_salehoo

Hi Atomicsirens,

You need to register for a sales tax permit, and most of the states will allow online registration. Thereâ€™s a list of Official IRS Sites and links by state here Link hidden: Login to view

Once you have your permit, you can then collect sales tax from your customers. If you will notice, most of the purchase receipts show the tax amount separately. Online, your shopping cart checkout/payment page should show the tax calculation. This program/software should be set with the applicable sales tax charges. After collecting the sales taxes, you should keep records on how much you have collected. Check with your state the schedule of when you are expected to file and pay up sales taxes. Depending on the volume of your sales, the frequency of payment varies (at least quarterly for most states) . You need to be diligent in this responsibility to avoid penalties. :) You can also take advantage of filing sates tax reports and paying online, and getting a discount if you make a pre payment, just check with your stateâ€™s department of revenue.

Let us know if you need further help. :)

atomicsirens

Hi irene, thanks for the reply, i already have my sales tax id. But im still not sure how to collect taxes from residents in my state and set it all up as the tax rates are different in counties and cities, like New york state tax rate is 4.000, but albany is 8.000, new york city is 8.875 and upstate is 8.750, so which one do i use? how do i calculate this etc. this is all so confusing

irene_salehoo

Hi Atomicsirens,

There are several 3rd party eCommerce setups/shopping carts solution that will allow you to set the rates and then collect sales tax automatically, by zip-codes. See Link hidden: Login to view and Link hidden: Login to view

The tax rates also be set manually, and hereâ€™s a tutorial on how to set them, by zip codes, at Google Checkout

(see video 1) Link hidden: Login to view

Link hidden: Login to view

For a calculator for these rates, you can refer to Link hidden: Login to view

Some create an excel spreadsheet of the zip codes and integrate it into a shopping cart, say Link hidden: Login to view

I completely understand how exasperating it would feel to do business in a tax system as complicated as NY's. :) But be consoled that you're not the only one, in fact even those in the business for years are still struggling with this issue. Let me share with you some discussions, but do not get confused, as a lot of unverified information adds to the mystery. :)

Link hidden: Login to view

Let us know if you need further help. :)

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