Did you know that in some states you need to renew your sales tax registration? Some states don’t require renewals—once your business is registered, it’ll stay that way until you close your business. Other states, like Colorado, ask businesses to renew sales tax registrations on a regular basis.
Colorado’s sales tax registrations always expire on odd-numbered years, like 2013 for this year. The first time you register for sales tax in Colorado, you might only get a few months before having to renew again. This could be true if you opened your business this month or created a nexus event that requires registration now. Businesses will have to renew their sales tax registration in Colorado by the end of the year to keep operating in the clear come January. Other states, like Pennsylvania, automatically renew sales tax permits every five years and don’t require action on the part of the business.
Keeping up with sales tax is more than just doing sales tax filings on time with a high amount of accuracy in your sales tax calculations. Be sure to make a list of states where you do business and remit sales tax and find out if and when you need to renew sales tax permits and licenses. It’s a good idea to put this information on a group calendar shared with different members of your sales tax department or even people who might not be involved with sales tax but who help manage the business. If you’re the only one in your company who is focused on sales tax, you’ll want to be sure that this information is accessible.
At any point in the future if you were to leave the business or take on a new role where you’re not completely focused on sales tax, renewal obligations could easily be missed. Operating without a sales tax permit can carry hefty fines in some states.