How to Navigate the January Sales Tax Perfect Storm

By Mark Faggiano

A storm is coming… 

If you’re an online seller, you can virtually guarantee that you will have a tax deadline in January.

At TaxJar, we call January the “Sales Tax Perfect Storm”. It pays to get your ducks in a row now before holiday returns season kicks into full swing. Next thing you know, it’s already January 15th, and you have to file your sales tax return by the 20th. Yikes!

To get ready, we’ve put together a few steps to help you file your January sales tax returns as soon as you’re done celebrating the arrival of 2017:

Find your January sales tax filing due dates

Every state’s January sales tax due dates are slightly different. Here’s a list of when sales tax is due in January for every state.

Report your owed sales tax for each state where you have sales tax nexus.

Sales tax nexus typically means having “significant” presence in a state. If you have a nexus you will be required to file sales tax returns for that state.

You’ll always have nexus in your home state, but if you have remote workers, sell at craft fairs, or stock merchandise in warehouses in other states, you may have nexus in other states too!

Here’s a guide to help determine if you have nexus in a state.

File your January sales tax returns

After you’ve figured out the source and amount of sales tax you’ve collected, you’ve done the hardest part of the job–now you just need to file the return!

There are usually a few different options for filing:

• Filing online:

To file online, you’ll need to find your state’s sales tax portal website, fill out the detailed form, and submit payment through its system. Sometimes this is the same system as the portal, but usually not. (Though they’re working on it, states are just not that tech-savvy yet.)

• File by mail:

In 2017 many states allow you to file tax returns the same way most people did in the 1930s, but other states are discontinuing the option to mail in returns. You can find out for sure on the state’s Department of Revenue website.

• AutoFile:

With this option, TaxJar will file your sales tax returns for you in nearly every state. You won’t need to complete any forms; it’s all done automatically. AutoFile is even smart enough to figure out if your state has a tax discount for filing on time and will apply that discount automatically!

No matter which of these methods you choose, you should make sure you file for every state where you have nexus, even if you owe no sales tax for that filing period.

Prepare for Your Next Sales Tax Filing

After January 1st arrives, keep track of any new states where you may have established nexus and make sure to register for permits in those states as soon as you discover you have nexus there–you can’t legally collect sales tax until you’ve received your permit for that state.

On the other hand, you may discover that you no longer have nexus in a state anymore. If that happens, contact the state’s department of revenue and let them know as soon as possible so you can begin ending your business relationship with that state. In some states you may have “trailing nexus” and have to keep filing for a set period after your reason for having nexus has ended, so it’s important to check that state’s regulations.

By this point in the process, you will have filed your tax returns for each of the states in which you have nexus and you can now get back to business. We know that sales tax compliance is never fun, but having a system to automate your pain away helps keep the hassles at bay and leaves you more time to deal with keeping (or not keeping) your New Year’s Resolutions.

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