Tax Basics
This tax is typically charged on the retail sale of tangible personal property.
What is sales tax?
This term refers to a sufficient physical or economic presence that obligates a business to collect sales tax.
What is nexus?
This certificate allows a buyer to purchase goods tax-free for resale.
What is a resale certificate?
This is the most common frequency for filing sales tax returns.
What is monthly?
This is the process by which the state reviews a business's compliance with sales and use tax laws.
What is an audit?
This tax applies when sales tax was not collected but the item is taxable.
What is use tax?
The 2018 Supreme Court case that established economic nexus for sales tax.
What is South Dakota v. Wayfair?
Sales to these types of organizations are often tax-exempt.
What are nonprofits?
A late sales tax return can result in this.
What is a penalty?
A business should retain exemption certificates for at least this many years.
What is 3–4 years (varies by state)?
True or False: Services are always subject to sales tax.
What is false?
Having employees, inventory, or an office in a state may create this.
What is physical nexus?
This exemption applies to items used directly in manufacturing.
What is the manufacturing exemption?
This form must often be filed even if there is no tax due.
What is a zero return?
States typically audit this area most often in retail or distribution companies.
What is exempt sales?
This term refers to the final consumer of a taxable good.
What is the end user?
Before collecting sales tax in a state, a business must do this.
What is register for a sales tax permit?
True or False: A seller is always liable if a resale certificate is invalid.
What is true?
This document summarizes how much sales tax was collected by jurisdiction.
What is a sales tax return?
During an audit, the auditor may use this method when records are incomplete.
What is an estimation method?
Sales tax is considered this type of tax, meaning it's imposed on the buyer but collected by the seller.
What is a trust tax?
The dollar or transaction threshold that creates economic nexus varies by this.
What is state?
This type of exemption applies when goods are shipped out of state.
What is interstate commerce exemption?
Many states offer this for filing and paying on time.
What is a timely filing discount?
This is the term for unpaid tax plus penalties and interest owed to the state.
What is a tax liability?