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Do I Need to Pay Sales Taxes Quarterly or Monthly?

  • May 12, 2016 | Suzanne Kearns

Just when you feel like you’ve finally figured out how to collect sales tax in all the states where you’re required to, you’re faced with another learning curve: how to remit them. And as you can imagine, the answer isn’t clear-cut.

In fact, all states have different rules when it comes to remitting sales tax, and each is based on the specifics of the business that will be remitting them.

So, Should I Pay Quarterly or Monthly?

The simple answer is, it depends. Most states base the remittance requirements on the sales volume of the seller. For example, if you have to collect and remit sales tax in Colorado, its law says you will have to pay monthly if you sell $10,000 or more per month. Any less than that, and you only have to pay them on a quarterly basis. And if you collect $15 or less per month in sales taxes, the State of Colorado allows you to submit a request to its DOR to pay them once a year.

Texas has the same type of system, but its numbers look a little different. The Lone Star State law requires sellers who collect $500 a month in sales tax to file monthly, and sellers who collect less than that are only obligated to file quarterly. If you collect $1,000 or less per year in state sales and use tax, the state allows you to file annually.

On the other hand, if you pay sales tax in Rhode Island, regardless of how much you collect, you will have to pay it on a monthly basis. The law does make allowances for those who average less than $200 per month in sales taxes. Those businesses that collect that amount can ask the Rhode Island DOR for permission to file quarterly.

And finally, Pennsylvania has a slightly different take on the matter. The state law requires all businesses to begin by filing quarterly sales taxes during the first year, and then after that the state determines how often the business should file based on the amount of sales tax collected.

Learn the Laws in the States Where You File

Because every state has different laws, you’ll need to learn what they are in every state where you’re required to collect sales tax. You can either contact the Department of Revenue in every state in which you have nexus, or you use an automated sales tax system that will do the work for you. Either way, it’s important to stay in compliance and file your returns on time.

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.
Avalara Author
Suzanne Kearns
Avalara Author Suzanne Kearns