sales tax small amounts for many states

My client here in MI has this year started a web site that has sold widgets to many states, with CA getting the most sales.

Each state has less than $100 of sales tax, but CA has about $1,500. Total revenue is $59k for all states.

My client has collected sales tax on each online sale, so it needs to be paid to each state?

Does it matter when it gets paid?

Do i need to register for a sales or Use Tax ID with each one of these states, so I can file a return & pay the tax ?

Need to lookup the sales tax nexus rule in each state. A lot of these things changed due to Wayfair v. South Dakota. Most states either have a minimum dollar or number of transaction threshold.

Need to lookup the sales tax nexus rule in each state. A lot of these things changed due to Wayfair v. South Dakota. Most states either have a minimum dollar or number of transaction threshold.

yes, but the year is almost done, and the threshold per state is per year.

Since i am below the threshold for the year for each state, what do i do?

Since i am below the threshold for the year for each state, what do i do?

Tell him to refund the sales tax collected to all non Michigan customers. Tell him to stop collecting sales tax for all states except MI. Why didn't you tell him this 8 months ago when you first brought it up?

But i did tell him months ago, he also gave me the log-in & pw only a few weeks ago, after me asking for it many times.

You need to have client refund to customers urgently. This week. Many states require their residents to pay Use Tax on the individual tax return and customers will need the refund in hand to properly compute their liability.

Granted, many states also have a formula based on AGI to compute the Use Tax liability. However, with the increase in sellers required to remit to multiple states, those who take the time to report their liability may well opt for the actual method, especially if their AGI is relatively high. For that reason, I think your client has an obligation to deal with this before New Year.

My client will laugh at me for saying refund all customers for withheld tax.

If your client does not see this as a public relations opportunity, he is not very smart. Handled properly, it can generate goodwill and, maybe, recommendations from customers.

It is also the right thing to do. Otherwise, your client has been unjustly enriched.

Why would he laugh? You told him months ago, you're telling him again. He should have listened. If you charge reasonable fees, he'll cry when you tell him the fee to register for and file sales tax returns for 30 to 40 states.

Your client illegally collected tax funds and failed to pay them over to the several states. He has to PROPERLY deal with them, by paying them to the states or refunding the money. It sounds like he intentionally collected the taxes and never intended to pay them over.

It sounds like he intentionally collected the taxes and never intended to pay them over.

I've had a repair person come to my house and charge me $85 as a service call. I'm pretty sure that's not taxable for sales tax in the state of Ohio. I wondered if he did this on every single call and kept the extra $5. Obviously a few calls isn't going to make him a millionaire, but if he does 50-100 calls a month, that could pay a good chunk of a house payment if it went unreported for sales tax purposes...

Why would he laugh? You told him months ago, you're telling him again. He should have listened. If you charge reasonable fees, he'll cry when you tell him the fee to register for and file sales tax returns for 30 to 40 states.

He spent $4k on the tax software Avalara, he expects me to set it up & use it. Not my idea, I think TaxJar is easier to use. butt they expect sales to go to the moon soon, so i may as well register with the states,& pay the tax.

I think you will also find that many of the state payments are now late.

State of CA website drives me crazy, it just loops me back to the online services page
whenever i click on File a Return & Pay Taxes
https://www.cdtfa.ca.gov/

I think you will also find that many of the state payments are now late.

the 4th Quarterly return is due January 31 for State of CA

[url]
https://www.cdtfa.ca.gov/taxes-and-fees ... -dates.htm[/url]


edit:finally got my CERTIFICATE OF REGISTRATION - USE TAX

But when did the client start collecting sales tax?
Most state registrations ask for this. So if it was June 2021 chances are the first payment was due in July 21.
You can probably get out of penalties for reasonable cause.

started in Sept 2021.
But if its under $100, who cares, we will see

The State of North Carolina will care, if someone blabs to them. The going rate is 45 days in the Wake County Jail, which is usually suspended for a first offense. Usually. For a first offense only.

Seriously, juro, in the name o’ the wee man, why are you doing this? How many out of state sales are we talking about? Wouldn’t it have been easier to refund the sales tax? Then track state by state sales and register as required, going forward. Why would you create a filing obligation where none exists? Once you start filing, most states require a return every filing period, whether you have made sales there or not. Is your client going to pay for unnecessary filings?

Once sales tax is collected it is a state asset. Keeping it is theft of state property. Small bucks means improbable enforcement. This is yet another example of people getting away with tax crimes. The difference here is that the taxpayers are also getting ripped off. I expect states to adjust to this so that collection actions will become much more frequent.

In Florida the DOR is not nearly as active in collecting as the IRS. The DOR often relies on restitution via a criminal case. (Basically shifting the collection function to the state attorneys.)

The State of North Carolina will care, if someone blabs to them. The going rate is 45 days in the Wake County Jail, which is usually suspended for a first offense. Usually. For a first offense only.

Seriously, juro, in the name o’ the wee man, why are you doing this? How many out of state sales are we talking about? Wouldn’t it have been easier to refund the sales tax? Then track state by state sales and register as required, going forward. Why would you create a filing obligation where none exists? Once you start filing, most states require a return every filing period, whether you have made sales there or not. Is your client going to pay for unnecessary filings?

My client spent over $4k on Avalara software. I told them to wait & see, but they said this would go to the moon.

Avalara software should automate the process, i want to see if it does.