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If your business is involved in the sale of tangible products or select services and you operate in California, New York, Texas, Florida or Illinois, you may be required to register to collect and pay sales tax. Here is a breakdown of how to pay sales tax in these top 5 U.S. states.

California

In California, the California State Board of Equalization (BOE) is responsible for the collection of sales tax. To register as a sales tax vendor in California, you must apply for a seller’s permit. You can register for your seller’s permit using the California Department of Tax and Fee Administration’s (CDTFA) online registration system.

Products and Services Subject to Sales Tax

In California, the products that are subject to sales tax include all personal property that is being sold to the end consumer for “storage, use, or consumption.” Generally, California does not collect sales tax on services. However, services that are considered to be “inseparable from the sale of a physical product” such as setup or assembly services which result in the creation of tangible personal property are considered taxable.

A full list of taxable items can be found in Sales and Use Tax: Exemptions and Exclusions (Publication 61).

Filing Due Dates and Payments

The CDTFA will assign a filing frequency (quarterly prepay, quarterly, monthly, fiscal yearly, yearly) based on your reported sales tax or your anticipated taxable sales at the time of registration. Due dates vary depending on your reporting basis. Nearly all sales tax accounts can use the BOE’s online filing services to file online.

New York

To register as a sales tax vendor in New York, you must register with the New York State Tax Department and obtain a Certificate of Authority.

Products and Services Subject to Sales Tax

In New York, the products and services that are subject to sales tax include:

  • tangible personal property (unless specifically exempt);
  • gas, electricity, refrigeration and steam, and telephone service;
  • selected services;
  • food and beverages sold by restaurants, taverns, and caterers;
  • hotel occupancy; and
  • certain admission charges and dues.

A full list of the products and services that are subject to sales tax can be found here.

Filing Due Dates and Payments

In New York, you must Web File your sales tax returns except in specific circumstances (e.g. your business does not have access to broadband internet). Payments for sales tax are made to NYS Sales Tax Processing.

In addition to filing the main return, you may also be required to complete one or more schedules that are used to report certain types of transactions. You must file sales tax returns no later than 20 days after the period to be reported has ended.

New York State will notify you as to whether the payments should be made on a quarterly, part-quarterly (monthly), or annual basis with the department. A sales and use tax return must be filed by the due date even if your business did not make any taxable sales or purchases during the reporting period.

Texas

In Texas, the Texas Comptroller is responsible for the collection of sales tax. Sellers can apply for a Sales Tax Permit online via eSystems. All retail sales, leases, and rentals of most goods and taxable services are subject to sales tax.

Filing Due Dates and Payments

The Texas Comptroller will notify you by letter after your sales tax permit has been approved as to your reporting basis. Texas requires businesses to pay sales tax on a quarterly, monthly or yearly basis.You must file sales tax returns no later than 20 days after the period to be reported has ended.

To submit their sales tax returns taxpayers have the option to webfile, use the Electronic Data Interchange (EDI), TELEFILE, if there are no taxable sales to report, or submit paper tax reports. Payments can be made via check, EFT, EDT, or TEXNET. Some taxpayers are required to pay electronically via TEXNET and will be notified as to this requirement.

Florida

In Florida, the Florida Department of Revenue is responsible for the collection of sales tax. You must submit a Florida Business Tax Application Form (DR-1) to receive permission to collect sales tax before you begin your business activities.

Products and Services Subject to Sales Tax

Every sale, admission, storage, or rental in Florida is taxable unless the transaction is exempt. All businesses engaged in the following activities must register and collect sales tax:

  • Sales of taxable items at retail.
  • Repairs or alterations of tangible personal property.
  • Leases, rentals, or licenses to use real property (for example, commercial office space or mini-warehouses).
  • Rentals of short-term living accommodations (for example, motel/hotel rooms, beach houses, condominiums, timeshare resorts, vacation houses, or travel parks).
  • Rentals or leases of personal property (for example, vehicles, machinery, equipment, or other goods).
  • Charges for admission to any place of amusement, sport, or recreation.
  • Manufacturing or producing goods for retail sales.
  • Selling service warranty contracts.
  • Operating vending or amusement machines.
  • Providing taxable services (for example, investigative and crime protection services, interior nonresidential cleaning services, or nonresidential pest control services).

Filing Due Dates and Payments

Florida businesses are required to pay sales tax on a monthly, quarterly, semiannual or annual basis. The Department will notify you as to your reporting basis.

You have the option to web file online using the File and Pay web page or by using software from an approved vendorYou must file sales tax returns no later than 20 days after the period to be reported has ended.

Illinois

The Illinois Department of Revenue is responsible for the collection of sales tax in Illinois. Businesses must register with the Illinois Department of Revenue online through MyTax Illinois or by completing Illinois Business Registration Application (Form REG-1) to obtain a tax number and Certificate of Registration.

Products and Services Subject to Sales Tax

Sellers are required to collect and remit sales tax on general merchandise, qualifying foods, drugs, and medical appliances, and/or prepaid wireless telecommunications service.

“General merchandise” includes sales of most tangible personal property including sales of:

  • soft drinks and candy;
  • prepared food such as food purchased at a restaurant;
  • photo processing (getting pictures developed);
  • prewritten and “canned” computer software;
  • prepaid telephone calling cards and other prepaid telephone calling arrangements;
  • repair parts and other items transferred or sold in conjunction with providing a service under certain circumstances based on the actual selling price; and
  • grooming and hygiene products.

Services in Illinois are generally not taxable except for if the service you provide involves manufacturing a product.

Filing Due Dates and Payments

Illinois businesses are required to pay sales tax on a monthly, quarterly or annual basis. The Illinois Department of Revenue will notify you as to your reporting basis, however, you should confirm this with your internal accounting to make sure you’re not being overtaxed. Sales tax returns should be filed no later than 20 days after the period ended.

In each of these states, local taxing jurisdictions (cities, counties, special purpose districts, and transit authorities) may impose additional sales tax registration and collection requirements. Make sure to check for these requirements as well.

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