The Early Bird Gets the Worm: How to Save on Sales Tax

For retailers, e-commerce sellers and other businesses that are required to collect sales tax from their customers, it’s a plain nuisance to report and remit that tax to the state tax authorities. But did you know that in many states, remitting on time or early brings you a nice discount?

That’s right, you get to keep a percentage of the sales tax you collect!

Look on the state’s sales tax filing form to see what discounts are available. (Sometimes they only apply to certain types of sellers or situations.) If you think you should get one that’s not on the filing form, contact the state’s department of revenue.

A State by State guide to the sales tax discount

Alabama: If the tax is paid before the 20th day of the month, the discount is

• 5% of the first $100 of tax due

• 2% of tax over $100, up to $400

Arizona: If tax is paid on time, the discount is 1% of the tax due, up to $10,000 per calendar year.

Arkansas: If tax is paid before the deadline, the discount is 2% of the tax due, up to $1,000 per month.

Florida: If tax is paid on time and paid by E-file/E-pay, the discount is 2.5% of the tax due, up to $1,200 per month.

Georgia: If tax is paid on time, the discount is

• 3% of the first $3,000

• 0.5% of tax over $3,000

Illinois: If tax is paid on time, you may choose the greater of

• 1.75% of the tax due; or

• $5 per calendar year

Indiana: If tax is paid on time, the discount is

• 0.93% if annual tax collected totals less than $60,000

• 0.6% if annual tax is between $60,000 and $600,000

• 0.3% if annual tax is more than $600,000

Kentucky: If tax is paid on or before the due date, the discount is

• 1.75% of the first $1,000

• 1.5% of tax over $1,000, up to $1,500 and/or a maximum of $50 discount received

Louisiana: If the tax is paid on time, the discount is 0.935%.

Maryland: If tax is paid on or before the due date, the discount is

• 1.2% of the first $6,000

• 0.9% of tax over $6,000, with a maximum of $500 discount received

Michigan: You may choose the greater of two options:

• If tax is paid before the 12th day of the month, the discount is 0.75% of up to $20,000; if paid between the 12th and 20th day of the month, the discount is 0.5% of up to $15,000

• If tax is paid on time, deduct the tax collected on $150 purchase price

Mississippi: If the tax is paid by the 20th day of the month, the discount is 2%, with a maximum of $50 per month and $600 per year discount received.

Missouri: If the sales tax return is postmarked before the due date, the discount is 2%.

Nebraska: If the tax is paid on time, the discount is 2.5% of the first $3,000.

Nevada: If the tax is paid on time, the discount is .25%.

New York: If the tax is paid on time, the discount is 5%, with a maximum of $200 per quarter (or longer) discount received.

North Dakota: If the tax is paid on time, the discount is 1.5%, with a maximum of $110 per month discount received.

Ohio: If the tax is paid on time, the discount is 0.75%.

Pennsylvania: If tax is paid on time, the discount is

• For monthly filers, the lesser of $25 or 1% of the tax due

• For quarterly filers, the lesser of $75 or 1% of the tax due

• For semi-annual filers, the lesser of $150 or 1% of the tax due

South Carolina: If tax is paid on time and in full, the discount is

• 3% of tax less than $100

• 2% of tax over $100, with a maximum of $3,000 per fiscal year discount received ($3,100 if filing electronically)

Tennessee: A discount is ONLY available for out-of-state sellers who are filing voluntarily through the Streamlined Sales Tax Initiative. The discount is

• 2% of the first $2500

• 1.15% of tax over $2500

Texas: Discounts are

• 0.5% of tax paid on time; plus

• 1.25% of prepaid tax

Utah: Discounts are offered for both in-state and remote sellers who file returns on time.

• For sellers with state nexus, the discount is 0.75%

• For remote (non-nexus) sellers, the discount is 18%, but to receive it you must file electronically at the Utah Tax Commission website or the Streamlined Sales and Use Tax Agreement’s simplified electronic return (SER)

Virginia: If you owe less than $20,000 in state — not local — sales tax, discounts (with some exceptions according to tax type) are

• 1.6% of $0 to $62,500 monthly taxable sales

• 1.2% of $62,501 to $208,000 monthly taxable sales

• 0.8% of $208,001 or greater monthly taxable sales

Wyoming: If tax is remitted on or before the 15th day of the month, the discount is

• 1.95% of the first $6,250

• 1% of tax over $6,250, with a maximum of $500 per month discount received.

As we’re sure you know, the flip side of early payment discounts is late payment penalties. Don’t let lack of time or knowledge to get tax filings done accurately and speedily cause your business to lose money.

When you let your Xendoo team handle the sales tax filing hassles, you can rest assured that you’ll be taking advantage of every money-saving opportunity possible. Meanwhile, you’ll be enjoying the freedom to focus on making your business grow.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

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