Who Needs to File U.S. Sales Tax Returns?
Do You Have a Sales Tax Nexus?
You must file sales tax returns in states where you have nexus.
There are two primary types:
Physical Nexus
- Office or employees in a state
- Warehouse or inventory (including marketplace fulfillment centers)
- Contractors or sales representatives
Economic Nexus
- Revenue exceeding a state threshold (commonly $100,000)
- Transaction volume exceeding a set number (often 200 transactions)
After the Wayfair decision, economic nexus applies even without physical presence.
Marketplace and Remote Seller Rules
Marketplace facilitator laws require platforms like Amazon to collect tax on your behalf in many states. However:
- You may still need to register.
- You may still need to file sales tax returns.
- Marketplace sales must often be reported separately.
How to File US Sales Tax Returns
Filing US sales tax returns is one of the most operationally complex parts of running a business in the United States.
Unlike VAT systems in most countries, there is no single federal sales tax. Each state sets its own rules. Filing frequencies vary. Reporting formats differ. Some states require city-level reporting. Others require district-level detail.
If you’ve registered for a sales tax permit and started collecting tax, your next responsibility is filing and remitting correctly, and on time.
Step 1: Understand Filing vs. Remittance
These terms are often used together, but they are not the same.
Filing = submitting a sales tax return that reports your sales activity.
Remittance = sending the tax you collected to the state.
In most states, both are due at the same time. But legally, they are separate obligations.
Sales tax is considered a trust tax. You collect it from customers and hold it temporarily for the state. That means:
- The money is not revenue.
- You are acting as an agent of the state.
- Failure to remit can trigger serious penalties.
Step 2: Confirm Where You Must File
You only file in states where:
- You have nexus (physical or economic), and
- You are registered for a sales tax permit.
If you sell in multiple states, you will likely file multiple returns, each with its own deadline and reporting structure.
Step 3: Know Your Filing Frequency
When you register for a sales tax permit, the state assigns your filing frequency based on projected or historical sales volume.
Common frequencies include:
- Monthly – Higher-volume sellers
- Quarterly – Moderate sales
- Annual – Low-volume sellers
Your frequency can change as your business grows.
Important: You must file according to your assigned schedule until the state notifies you otherwise.
Step 4: Gather the Required Data
Each sales tax return requires summary-level reporting of your activity for the period.
You’ll typically need:
- Gross sales
- Taxable sales
- Exempt sales
- Resale certificate transactions
- Marketplace sales
- Sales tax collected
- Adjustments or credits
- Tax due
Some states require breakdowns by:
- County
- City
- Special tax district
Accurate recordkeeping is critical, especially if you operate across multiple jurisdictions.
Step 5: Complete and Submit the Return
Most states require online filing through their Department of Revenue portal.
While some states still allow paper returns, electronic filing is mandatory for:
- Higher-volume sellers
- EFT payers
- Many marketplace sellers
Each state’s return format differs slightly, but the structure typically includes:
- Total sales
- Deductions
- Net taxable sales
- Tax calculated
- Prepayments (if applicable)
- Final amount due
Step 6: Remit the Tax
Remittance methods typically include:
- ACH debit
- Electronic Funds Transfer (EFT)
- Credit/debit card (often with processing fees)
In most states, payment is due on the same date as filing.
Late remittance may result in:
- Late payment penalties
- Interest charges
- Collection enforcement
Zero Returns: Do You Still Need to File?
Yes, in most cases.
If you are registered for sales tax, you must file even if:
- You made no sales
- You collected no tax
These are called zero returns.
Failure to file zero returns is one of the most common compliance errors.
Special Filing Situations
Marketplace Facilitator Sales
If you sell through platforms like Amazon or Etsy:
- The marketplace may collect and remit tax on your behalf.
- You may still be required to register.
- You may still be required to file returns.
- You may need to report marketplace sales separately.
Each state handles this slightly differently.
Exempt Sales
Common exemptions include:
- Sales for resale (with valid resale certificates)
- Sales to nonprofit or tax-exempt entities
- Certain digital goods (depending on the state)
You must maintain documentation to support exemptions in case of audit.
Home Rule States
Some states allow cities to administer their own local sales taxes.
Home rule states include:
- Alabama
- Alaska
- Arizona
- Colorado
- Louisiana
These states may require additional local registrations or filings beyond state-level returns.
States Without Traditional Sales Tax
Two states use alternative structures:
Hawaii – General Excise Tax (GET)
New Mexico – Gross Receipts Tax (GRT)
These are imposed on the seller’s gross receipts rather than collected strictly as sales tax from customers.
The filing mechanics are similar, but the tax structure differs.
Sales Tax Due Dates
Due dates vary by state but commonly fall on:
- The 20th of the following month, or
- The last day of the following month
If the due date falls on a weekend or holiday, the deadline generally moves to the next business day.
Always confirm deadlines through the state’s official tax portal.
State-by-State U.S. Sales tax Filing
While every state has its own portal, most follow this pattern:
- Login to the state tax portal
- Select the filing period
- Enter summary sales data
- Confirm calculated tax
- Submit return
- Schedule or submit payment
Some states require additional local jurisdiction reporting fields.
Because filing procedures and forms change periodically, businesses should rely on each state’s official Department of Revenue website for the most current instructions.
Common Filing Mistakes to Avoid
From practical experience advising multi-state sellers, the most common errors include:
- Missing filing deadlines
- Forgetting to file zero returns
- Misreporting marketplace sales
- Failing to itemize by local jurisdictions
- Not closing accounts when ceasing activity
- Poor resale certificate documentation
Sales tax compliance is procedural discipline, not complex tax strategy.
Record Retention Requirements
Most states recommend keeping:
- Sales transaction records
- Exemption certificates
- Filed returns
- Payment confirmations
- Marketplace reports
Retention periods generally range from 3 to 7 years.
In audit situations, proper documentation is your best defense.
Managing Multi-State Filing at Scale
As your footprint grows, filing complexity increases:
- Multiple monthly returns
- Different due dates
- Different reporting breakdowns
- Prepayment requirements in certain states
Many growing businesses use automation tools to:
- Calculate correct tax rates
- Track nexus thresholds
- Generate jurisdiction-level reports
- Auto-file returns
However, automation does not replace oversight. Nexus monitoring and registration decisions still require active management.
Sales Tax for International Businesses Selling into the U.S.
Foreign companies frequently assume U.S. sales tax applies only if they establish a U.S. entity. That is incorrect.
International businesses can trigger economic nexus simply by exceeding sales thresholds into a state.
Key considerations:
- No U.S. incorporation is required to create nexus.
- Registration may be required state-by-state.
- Filing obligations exist even without a U.S. office.
- Non-compliance can create historical exposure.
Commenda works extensively with international SaaS providers, DTC brands, eCommerce companies, and marketplace sellers entering the U.S. market.
Simplify Compliance with Commenda Sales Tax Filing Software
Filing US sales tax returns isn’t conceptually difficult, but it demands consistency, precision, and ongoing oversight.
To stay compliant, you must:
- Monitor where you trigger nexus
- Register promptly in new states
- File on time, even when no tax is due
- Maintain audit-ready records
- Track evolving reporting rules across jurisdictions
Commenda Sales Tax Filing Software centralizes nexus monitoring, automates multi-state filings, and keeps your compliance on track, without forcing your team to manage dozens of state portals.
Frequently Asked Questions
1. How do I know how often I must file?
The state assigns your filing frequency when you register. It may change based on your sales volume.
2. What happens if I miss a filing deadline?
You may incur penalties, interest, and possible enforcement actions.
3. Do I need to file if I made no sales?
Yes. Most states require zero returns unless your account is officially closed.
4. Are filing and payment always due on the same day?
In most states, yes, though technically they are separate obligations.
5. Can I file in all states through one portal?
No. Sales tax is state-administered, so each state requires separate filing.
6. What is a home rule state?
A state where local jurisdictions administer their own sales taxes and may require additional filings.
7. How long should I keep records?
Typically 3–7 years, depending on the state.
8. What if I stop selling in a state?
You must formally close your sales tax account and file a final return.
9. Is sales tax the same as VAT?
No. Sales tax is imposed at the point of sale and administered at the state level, not federally.
