The five steps for managing sales tax

Step 2: Register to collect and remit tax

Overview

Once you determine where you have nexus, you’ll likely need to register in the appropriate tax jurisdictions. Unfortunately, the process, forms, and requirements to register aren’t the same for all state or local tax jurisdictions. In most jurisdictions, you must register before legally collecting sales tax within each separately administered tax jurisdiction, so be sure to register before moving to Step 3.

If you realize in Step 1 that you previously established nexus in a jurisdiction where you’re not registered and collecting sales tax, a past tax liability may have gone unaddressed. To rectify this situation, you may need to take additional steps to become compliant with the tax jurisdiction, such as backfiling unpaid taxes or participating in a voluntary disclosure agreement.

What to do:

Understand where you need to register and what licenses, forms, and registrations need to be completed. All states and jurisdictions are not created equal when it comes to getting set up, so it’s critical that you’re aware of the individual specifications.

Sales tax registrations 101

Get an initial understanding of what’s involved with registering in new jurisdictions.

Sales tax permits: A state-by-state guide

Understand individual state requirements for sales tax permits. When do you need one, and how do you go about getting one?

Let Avalara help:

If you’ve established nexus and need to obtain licenses and register for sales tax in new states, Avalara Business Licenses can get it done in a snap. With registrations complete, you’ll be ready to tackle Step 3.

Next steps

The five steps for managing sales tax

NEED TO REGISTER IN MULTIPLE STATES?

The Streamlined Sales Tax (SST) program enables businesses to register in 24 member states with a single form. Qualifying businesses also receive additional benefits like free tax calculation, filing, and remittance — many of the additional steps necessary to remain compliant — when you partner with Avalara. With SST, businesses can tackle additional steps to stay compliant. Learn if SST is right for your business.

REMEMBER THE FIVE STEPS

Keep this checklist handy to remember these critical steps