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Sales Tax Filing Mistakes: Late Filing, No Filing, Improper Collection

sales tax mistakes late filing

Whether you file monthly, quarterly or on some other filing frequency, filing sales taxes for your e-commerce business is a vital area of operations. Proper tax filings will keep your company in compliance and help you avoid any hassle or issues; on the flip side, improper maintenance of this area may lead to a few concerns, from major time-consumers to actual financial penalties levied against your business in some cases.

At SalesTaxSolutions.US, we’re proud to offer numerous areas of assistance within the sales tax realm to our e-commerce clients, from sales tax returns and audit assistance to areas like e-commerce compliance and many others. Our years in this industry also mean we’ve seen examples of many of the largest mistakes companies can make with regard to their sales tax filing — this two-part blog series will go over some of these common errors, plus how to steer clear of them for your filing needs.

Filing Late

The most well-known error companies make with sales tax filing, and likely the most common, is a failure to file a return on time. In most cases, this will trigger a penalty and interest assessment from the state, along with other potential issues that may be associated with not filing your taxes in a timely manner.

State rules vary as to when they may assess late-filing fees against businesses — most states have specific timetables for these charges. For example, Alabama and Utah, which stipulate that businesses who fail to file or pay within 30 days can be charged with a five percent penalty on top of interest, in addition to actual taxes owed.

Need help filing late sales tax returns? SalesTaxSolutions.US can help. In addition to filing late returns, we submit penalty abatement forms to attempt to get the state to refund the late-filing penalties. We have saved companies thousands of dollars simply by submitting these penalty waiver forms.

Not Filing At All

Even in most cases where you don’t owe any specific sales taxes, you must still file a return — this includes businesses located in the District of Columbia, as well as those who make sales through affiliate marketing or referral links.

Any time you meet the minimum income and/or sales threshold (which varies by state), your business is required to file a tax return and potentially pay some level of tax. Failure to file can lead to a number of consequences, including a variety of fines and penalties levied against your company.

Incorrect Tax Collection Reporting

There are several specific areas of sales tax reporting where errors can lead to major issues, and one of the most prominent is when listing all tax collected from customers throughout the year. This requires not only broad tabulation, but also breakdowns of sales tax collections based on demographics like county, city, state, or even ZIP code.

Some companies who are new to the sales tax returns process may not realize this specific point — in fact, any time you file an incorrect sales tax return, you can be hit with significant interest fees and penalties on top of the actual taxes owed.

For more on how to avoid common mistakes while filing your sales tax, or to learn about any of our sales tax compliance and other solutions, speak to the team at SalesTaxSolutions.US today.


Christopher Stout

Christopher Stout has 25 years of experience as a sales tax accountant, working across a wide variety of industries and sales platforms. He's personally prepared or supervised the preparation of over 60,000 sales and use tax returns in his career.

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