As a result of recent changes to sales tax laws across most states, companies are now registering for sales tax in multiple states. However, the decision of how or when to register for sales tax should not take place in a bubble. Companies must be aware that registering for sales tax can lead to other tax requirements. Additionally, if you register for sales tax and have a historical liability, you may unintentionally waive your right to programs that can reduce related penalties or interest charges.
What is Sales Tax Registration?
A sales tax registration is an agreement by a company to collect sales tax for a state on their behalf. This is called a trustee tax and is similar to payroll taxes. When you complete this agreement, you are not the owner of the money you collect. Also, if you do not remit the sales tax to the state, hefty fines and penalties will be applied. Additionally, the owners, shareholders, and responsible employees may be personally liable for sales tax collected and not remitted.
Sales tax registrations generally require certain standard pieces of information, including:
- Federal tax employer identification number (FEIN)
- Information on type and volume of sales
- Company location(s)
- Owner and shareholder personal information
When Am I Required to Register and Remit Sales Tax?
In general, retailers are required to register and remit sales tax in any jurisdiction where they have nexus. Nexus is established as having property, employees, or actively transacting business within a jurisdiction. Sellers that collect sales tax must file sales tax returns to the state and possible jurisdictions where sales tax was collected. The filing frequency of the sales tax returns can vary from monthly, quarterly, semi-annually, or annually. Collecting sales tax is an important step, but registering your business in the appropriate states is just as important. The lack of understanding sales tax code for a state where an obligation is established can lead well-meaning businesses and individuals to large tax assessments from audits.
Key Contacts
Jaclyn Harris
Director of Tax Compliance
Questions? Contact Us
Do International Companies Need to Register For Sales Tax?
Yes. All domestic and international companies that sell products or services into the United States and have established nexus in individual states must collect and remit sales tax. Since many international companies do not have a FEIN or US-based officers and owners, there can be challenges to completing these registrations. PMBA can help your company navigate these issues.
Our Sales Tax Registration Services
PMBA can assist companies in several ways with sales tax registrations. For businesses that have completed the necessary research and only want assistance with the registration process, our team can file registrations for a flat fee per state. Our team has filed thousands of registrations and can quickly and efficiently help you through the process.For companies that are not certain if they need to register or have other issues to consider, PMBA can conduct a Business Activity Nexus Analysis. Our sales tax specialists will review all your US activities, identify the states where nexus exists, and identify other potential filing requirements. Finally, if we discover through the analysis that historical liability exists, we will help you make business decisions on how to handle these liabilities.
