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Note to vendors: get sales tax rates right

  • Oct 7, 2016 | Gail Cole

 Be sure you're charging your customers the proper rate of sales tax.

It’s surprisingly easy for businesses to collect and remit the wrong amount of tax on a transaction. Local sales and use tax rates are subject to frequent change in many parts of the country, and businesses must ensure the most up-to-date rates are entered into their point-of-sale systems.

The Wyoming Department of Revenue recently announced that it has received “numerous calls from taxpayers reporting that vendors are collecting the incorrect sales tax rate on their purchases.” The department points out that “Wyoming has not had a sales tax rate change since October 2015.” No further details are provided about the nature of the errors, but the notice does stress that a rate change that took effect in the town of Lusk on October 1 is a lodging tax change that applies only to lodging services. Additional information.

Sellers are responsible for collecting the correct rate of tax in all states and may be held liable for errors. In Wyoming, for example, vendors are only reimbursed for tax erroneously collected if they first refund the taxpayer who originally over-paid the tax. If tax is under-collected, the vendor is liable for the amount owed.

Keeping track of rate changes is particularly challenging for sellers doing business in multiple states. Sales tax software simplifies tax compliance in all states. Learn more.

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.