At Balanced Bookkeeping of NC, we want to help you keep your business running smoothly. As tax season approaches, one thing you’ll need to take care of is your sales tax filing. In this article, we’ll go over the key information you need to know about sales tax filing in order to keep your business’ financial paperwork in order.
- Requirements Vary by Location- One thing you need to know about sales tax filing is that the regulations surrounding it vary a great deal depending on your location. Some states don’t collect sales tax at all and rely only on income tax, while others do the reverse. Here in North Carolina, you will need to collect sales tax, with rates varying from the state minimum of 4.75% to as much as 7.5%.
- Requirements Vary by Product- Another thing you should know about sales tax filing is that not all products or services are taxed equally. In general, items that are necessary for survival are taxed at a lower rate, or not at all, while items that are considered luxuries are taxed at a higher one. For instance, in North Caroline, prescription drugs are not subject to sales tax, because people need them to survive, while cigarettes are subject to additional taxes as a way to discourage people from smoking.
- You Need a Permit- Lastly, before you begin sales tax filing, you’ll need a sales tax permit. This legal document allows you to collect, report, and pay sales taxes in your state, and it needs to be approved before you can start operating your business.
