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File your zero sales tax return on time

  • Mar 29, 2017 | Laura McCamy

Your ecommerce business probably has nexus in more than one state. Amazon FBA, using an independent third-party logistics provider, or affiliate marketing are just three of the things that might have triggered the requirement for you to file and pay taxes in more than one state. But what if you haven’t shipped to any customers in a state where you have nexus this filing period? Do you still need to file a zero sales tax return?

In a word, yes, do file the zero sales tax return. This may seem like an unnecessary hassle, particularly if you have nexus in several states, but it’s worth your time.

When you file a zero return, you don’t have to send along any sales tax money. If you fail to file your return on time, however, you may start to rack up charges.

Most states charge penalties and interest on late sales tax returns based on the amount you owe. Ten percent of zero is zero, so what’s the harm in filing a zero sales tax return late? The answer is: plenty.

In New York State, for example, if you owe sales taxes and you file and pay late, the state calculates penalties and interest based on a percentage of the amount you owe. If you file a zero sales tax return late or simply don’t file it at all, you owe a flat $50 penalty. Multiply that by more than one state and by several filing periods and that zero sales tax return could start to cost you some bucks.

If you think of this from the state’s perspective, it makes sense. When you don’t file a sales tax return, the state doesn’t know if you are sitting on a big sum of money and failing to pay it. Your zero sales tax return shows you understand your obligations and helps the state understand its revenue stream.

Don’t make New York State call your mother to see if you are okay. File that zero sales tax return 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
Laura McCamy
Avalara Author Laura McCamy