Monthly Sales Tax Filing Workflow

Purpose: Gather complete sales data foundation for tax calculations Export complete sales reports from your POS system, e-commerce platforms (Shopify, WooCommerce, Amazon), and all other sales channels. Compile total taxable sales broken down by jurisdiction (state, county, city). Separate exempt transactions and verify all transaction dates fall within the current filing period. Key Actions: - Export reports from each sales channel - Categorize by jurisdiction (state, county, city) - Flag exempt vs taxable transactions - Verify date range accuracy

Purpose: Identify discrepancies between collected and owed amounts Compare the sales tax actually collected during the month with what should have been collected based on sales volume and applicable tax rates for each jurisdiction. Identify and investigate any discrepancies between collected and owed amounts. Document variance reasons such as rate changes, system errors, or manual overrides for audit trail purposes. Key Actions: - Calculate expected tax per jurisdiction - Compare against actual collections - Document all variances with reasons - Create reconciliation worksheet

Purpose: Ensure all exemptions are properly documented for audit protection Review all exemption certificates for customers who made tax-exempt purchases this month. Confirm each certificate is still valid, matches the transaction type, and is properly stored in your records. Request updated certificates from customers whose documentation is expired, missing, or does not cover the specific exemption claimed. Key Actions: - Pull list of exempt transactions - Match each to valid certificate - Check expiration dates - Request updates for expired or missing certificates Audit Risk: Invalid exemptions create direct liability exposure

Purpose: Prepare accurate returns for all required jurisdictions Prepare and complete sales tax returns for each state, county, and local jurisdiction where you have filing obligations. Enter taxable sales, exempt sales, deductions, and tax collected on the appropriate forms. Calculate any use tax owed on out-of-state purchases. Key Actions: - Complete returns for each jurisdiction - Enter taxable and exempt sales - Calculate use tax on out-of-state purchases - Verify amounts match reconciliation worksheet Quality Check: Double-check all calculations before submission

Purpose: File returns and remit payment on time to avoid penalties File returns through each state portal or tax filing system before the deadline. Schedule ACH payments or submit checks for taxes owed. Save confirmation numbers and payment receipts for your records. Key Actions: - File via each state portal - Schedule or submit payments - Save all confirmation numbers - Document payment amounts and dates Critical: Late filings incur penalties and interest charges

Purpose: Maintain complete audit-ready records File copies of submitted returns, payment confirmations, and supporting worksheets in your tax records folder. Update your filing calendar with next month due dates. Note any rate changes or new nexus obligations discovered during filing. Key Actions: - Archive returns and confirmations - Store supporting worksheets - Update next month deadlines - Note rate changes for future filings Record Retention: Keep all documentation for minimum 4 years

Purpose: Proactively identify new filing requirements Check if your business established nexus in any new jurisdictions this month through economic activity, employees, or physical presence. Economic nexus thresholds vary by state (typically $100K-$500K in sales or 200 transactions). Key Actions: - Review sales by state for threshold triggers - Check for new employee locations - Identify any new physical presence - Register for permits in new jurisdictions Compliance Note: Register before collecting tax in new states

Purpose: Verify all filing requirements are complete before month close Review this month filing for completeness: all jurisdictions filed, all payments made, all records archived, and next month deadlines calendared. Flag any issues requiring follow-up and assign action items before closing out the month. Checklist Items: - All jurisdictions filed on time - All payments confirmed - All records archived - Next month deadlines calendared - Outstanding issues documented Sign-off: Confirm month-end close is complete