About Small Business Sales Tax

Sales tax is a requirement and responsibility for all businesses. If you're selling online, you must charge sales tax for all transactions within your state.  You must know which items are taxable and which are not, and you must have a system for tracking sales tax you've collected, and it must be paid in periodically.

Taxable Items

Find out what items are taxable in your state. Generally, all nonfood items are taxable, but no always. To be sure, check with your state's department of revenue. Find your state's website and review the FAQs section for a detailed list and explanations.

Sales Tax Rates

Know your state's sales tax rate. This is the percentage that is charged on taxable transactions in your state. You can find a comprehensive list on states and taxable items on taxadmin.org.

Record Keeping and Filing

If you use a cash register or computer set up to record transactions for your business, you probably have an easy way of tracking sales tax. You simply extract that number for each filing period, file your sales tax return and make payments right online from your business bank account. To file electronically, register on the website. You can also file by mail.

Filing online is super easy. You will file under "Sales and Use Tax" on your state's filing website. For Pennsylvania, the website is e-tides.com. You must report all sales and all state taxable sales when you file.

If you have a very small business and do not track your transactions electronically, such as if you are selling on ebay.com, you will have to record your taxable transactions manually. You can do this as simply as maintaining an ongoing list on paper or using Microsoft Excel.