The levying and collection of sales tax is one of the most effective ways to fund the national debt, and it also contributes directly to the country’s growth and progress. If you’re running a business that sells products or services, you may be required by federal law to collect sales taxes on what you sell.
Failure to collect, document, and file sales taxes is viewed by New York State as a serious offense. This can result in high penalties, interest, and, in extreme cases, a company’s closure. Sales taxes vary from state to state and are based on gross receipts rather than net income. In this way, sales tax is quite different from the usual types of taxes.
Larger businesses and organizations have to file sales tax returns more frequently than usual, which could be either annually, quarterly, or monthly. In today’s digital age, managing a large establishment while keeping track of sales taxes can become quite difficult.
Because sales tax is a rather complicated beast, there are many different problems that can arise from it, some of which include:
- Calculation errors
- Location/jurisdiction errors
- Back sales taxes
- Delinquent sales taxes
- Incorrect sales tax forms
- Improper sales tax collections
- Incomplete sales tax forms
- Sales tax forms with wrong information
Owing sales tax debts to the government is much worse than owing income taxes as an individual because not only is the amount usually much higher, but it also affects an organization. Apart from high penalties and fees, the IRS does not shy away from strict collection practices, including tax liens, tax levies, and asset seizure. The worst part is that applying for tax relief schemes in such a situation is much more difficult than as an individual because the IRS usually values the company higher than the tax liability.
Organizations collapse every day due to unpaid taxes and errors in the sales tax form. These problems often arise when owners are not aware of how sales tax works. Each state has its own rules and regulations, so if you’re facing sales tax problems, consider hiring a certified tax professional with years of experience in the field. Tax code is extremely vast and difficult to understand – it would be folly trying to solve your problems yourself.
Long Island Tax Resolution Services’ highly qualified team of tax experts will help you understand and comply with sales tax laws with which you currently may have problems. We can help resolve your current issues so that your company can move forward.