Frequently Asked Questions

Yes. Sales tax is an indirect tax imposed on goods and sometimes services at the point of sale. It’s added to the item’s price and charged to the consumer. There is also a “seller’s use tax,” which is another term for sales tax, and applies to remote (out-of-state) sellers.

Use tax is a tax on the storage, use, or consumption of a taxable item or service on which no sales tax has been paid. It’s mutually exclusive with sales tax, and they often share the same rate.

It depends. For intra-state commerce, sourcing rules can be origin—or destination-based on the state, whereas inter-state sourcing rules are always based on the destination. Sellers should collect tax for the state where the property is delivered to the customer.

For example, if the item is shipped to the customer, the tax would be calculated and collected on behalf of the delivery state, whether that is the same state where the seller is located or a different state. However, if the customer picks up the item at the seller’s location, tax should be collected for the state where the seller is located.

Note: Sellers should only collect sales tax if registered to collect it in that state.

The statute of limitations for a sales tax audit varies by state, but it’s usually three to six years. This means that most state tax statutes have the right to go back and review your records for up to six years.

In some states, three to six years assumes you’ve been filing your sales tax returns. For example, California can increase the look-back period to eight years if a company has failed to file its sales tax returns. Texas has no limit on how far back they can look.

For this reason, keeping accurate records is vital for expediting the audit process and avoiding potential penalties. Ultimately, you shouldn’t be left guessing. That’s why Zamp offers an Accuracy and Filing Commitment for our customers.

In some states, sales tax holidays are mandatory, but other states allow retailers to opt in or out. Most states won’t penalize you for giving them more money.

However, it’s worth considering that you could potentially lose customers to competitors honoring the sales tax holiday, which can have other long-term ramifications.