Sales tax
Sales tax checklist
Sales tax is decided state by state, and the records that matter are the ones that show where the sale happened and why it was or was not taxable. This checklist covers what to collect from a business client for sales tax: the registrations and nexus review, the sales by state, the exemption certificates, and the returns already filed. Use it before a filing or a review of where the business should collect.
Who sends itSent by the firm to a business client that sells goods or taxable services, especially one that sells online or across state lines. The client can use it before a filing or when a new state asks about a registration.
0 of 24 ticked
01Registrations and nexus
02Sales records by state
03Exemption certificates
04Returns and payments
05Rates, taxability and records
What firms get wrong
- Registering in a state because a marketplace collects tax there, without checking which party is responsible for the filing.
- Using one state's taxability rules for every state, when the same product can be taxable in one and exempt in another.
- Missing the transaction-count threshold in a state that uses one as well as a dollar threshold.
- Keeping exemption certificates in a folder with no expiration date, so an old certificate is used after it lapses.
- Filing the return from the bank deposits instead of the sales records, which mixes tax collected with sales revenue.
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Questions about this checklist
What is sales tax nexus?
Nexus is the connection between a business and a state that lets the state require the business to collect sales tax. It can come from a physical presence, such as an office or employee, or from the state's economic nexus threshold.
Do online sellers have to collect sales tax in every state?
Not in every state. A seller usually registers where it has physical presence or where its sales cross that state's economic nexus threshold. The thresholds differ, so review the sales by state before registering.
What records should a business keep for sales tax?
Keep the sales reports by state, the exemption certificates, the filed returns, the payment confirmations and the rate change notices. These records support the tax collected and the exemptions claimed.
Does a marketplace collect sales tax for the seller?
Many marketplaces collect and remit sales tax on sales they facilitate, but the rules differ by state and by marketplace. Keep the marketplace reports and check which party is responsible before filing.
What happens if a business misses a sales tax filing?
The state may charge a late filing penalty and interest. Ask the firm to review the notice and the missing periods before responding, and file the missing returns as soon as the records are available.
Sources
- IRS: Small business and self-employed tax center
- IRS: Publication 334, Tax Guide for Small Business
- Streamlined Sales Tax: registration and rates
Checked November 3, 2026. Tax rules, forms and thresholds change; confirm them with the IRS or your tax software before relying on them.
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