Step 3: Calculate the correct sales tax amount
Once you register with the tax jurisdictions, you’re ready to start calculating and collecting sales tax. With more than 13,000 tax jurisdictions in the U.S. — each having unique tax rates and product taxability rules — it can be difficult to know the correct tax rate to charge. But, it’s crucial you get it right so you aren’t under-collecting for the tax authority, or over-collecting causing unhappy customers.
What to do:
Ensure you understand the variables of a tax rate, such as tax jurisdiction rules and product taxability for what you’re selling. From there, have a plan in place to quickly and accurately apply the tax rates to every transaction.
Let Avalara help:
If you don’t already have Avalara AvaTax working behind the scenes, you’re missing out on automated sales tax calculations — in real time. Get tax rates at the time of sale, based on geolocation and product taxability. With automated sales tax calculations taken care of, move on to address exempt sales in Step 4.