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bill-fawcett-tx-
July 15, 2024
Question

What should a client do with sales taxes collected if the annual total does not meet the state's minimum for reporting?

  • July 15, 2024
  • 2 replies
  • 0 views
Annual sales is <$100,000 in Illinois.

2 replies

Rainflurry
Rainflurry
July 15, 2024

@bill-fawcett-tx- 

 

Yikes.  Why did they collect sales tax before meeting the economic nexus of $100K in sales or 200 transactions?  Did they not meet the 200 transaction threshold either?  Perhaps you know this but your client should not start collecting sales tax until they meet the economic nexus, not before.  Once they meet nexus in IL (checking the prior 12-month period every quarter), they are required to collect sales tax for a period of one year.  At this point, if sales tax was improperly collected, the money belongs to their customers.    

    A
    AnneMariee
    July 15, 2024

    Let me provide some information about sales tax reporting, Bill.

     

    In Illinois, even if your collected sales tax is below the state's reporting threshold, you're still required to report and remit any collected sales tax to your tax agency. It's important to comply with sales tax collection and remittance rules regardless of the total amount collected.

     

    For more detailed information, I'd recommend contacting your state tax agency for further clarification.

     

    Additionally, here are some resources that might be helpful:

     

     

    I'll also leave this guide on recording, adjusting, and deleting sales tax payments in QuickBooks Online: Manage sales tax payments.

     

    Please feel free to come back to the forum if you need any further guidance regarding taxes in QuickBooks. I'll be around to ensure your concerns are taken care of. Take care!

    Rainflurry
    Rainflurry
    July 16, 2024

    @bill-fawcett-tx- 

     

    Upon further inquiry, it appears your client should voluntarily submit the tax collected to IL.

     

    https://tax.illinois.gov/content/dam/soi/en/web/tax/research/taxinformation/sales/documents/registration-resources-for-remote-retailers.pdf 

     

    @AnneMariee - Your links are for businesses with a physical presence in IL.  This question is regarding a business without a physical presence in IL.  

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