Article by David Joseph, co-founder, DAVO by Avalara
Tax season is here and as a business owner or manager, you’ve got your hands full. Payroll requirements, income tax and sales tax deadlines all converge at once. To get a handle on this sales tax season, we’ve got answers to your top questions about sales tax.
Where can I find my state’s sales tax due dates and tax rates?
Every state has different due dates and requirements around sales tax filings as well as unique sales tax rates. Within one state, some items may be taxed differently than others. You should check with your state’s department of revenue to understand your situation. DAVO Sales Tax offers a handy State-By-State Sales Tax 101 guide that answers the basics for each state.
What’s new for the 2023 sales tax filing season?
Because of a recent Supreme Court ruling, many states have changed their laws or enacted new ones around e-commerce taxation. In reaction to these changes, 3rd party food delivery apps have changed their terms and operational procedures. The apps may not be responsible for collecting and remitting sales tax or vice versa. It’s important to check your terms and arrangement to make sure your systems are set-up correctly to account for sales tax collection and remittance.
Can I get a discount for paying my sales tax?
Yes, in 27 states you can get a discount for paying your sales tax on-time and in full by the due date. It pays to develop a sales tax management system to make sure you can pay on time to reap the benefits of the discount. Take advantage of the savings to invest in a sales tax automation solution.
What are common ways businesses may be overpaying sales tax?
3rd party food delivery apps open up new revenue streams for foodservice operators but they also have many operational considerations. Apps like GrubHub, DoorDash, and Uber Eats may be collecting and paying sales tax on your businesses’ behalf. It’s important to make sure your POS is configured accurately to track what sales tax has been collected and what is owed. Each app may have different terms. You certainly don’t want to find yourself double paying sales tax!
What should I do if I can’t pay my sales tax?
You should still file even if you cannot pay your sales tax in full or at all. Make a plan to allocate funds to pay off the sales tax bill and save for the next one. The State may be more amenable to a payment plan or negotiation if you have a solid plan to make sure you can pay your next sales tax bill.
Is sales tax software worth it?
Most likely, yes, sales tax software will save you time and money by automating the entire process. Sales tax apps, like DAVO by Avalara, seamlessly integrate into the most popular POS systems in just a simple, quick set-up. From there, the app calculates the exact amount of sales tax collected every day and sets it aside in a secure holding account. When sales tax is due, the app files and pays the sales tax owed – on time and in full.
Foodservice operators have enough on their plate. Sales tax automation removes the stress of filing on time and ensuring you have enough cash on hand to pay. Automating a back office task gives you more time to work on front of the house revenue generating activities.
DAVO Sales Tax can help you gain back valuable time to focus on the priorities that will help the business grow. With just a few minutes of set up, your sales tax process, filing and payments are on autopilot. Give it a try and see how much time and hassle you can save. The app offers a free trial for the first month.
As a former restaurant owner, David Joseph is no stranger to the struggles of restaurant sales tax. A self-proclaimed sales tax evangelist, David co-founded DAVO by Avalara, a sales tax automation platform that integrates directly with the point of sale.
