If you’ve determined you have nexus in a state, registered for a sales tax license, and declared nexus on TPT to begin collecting sales tax, the next step is to file and remit sales tax. You can use this page to find the information and links to reports you need for remitting your taxes (if you’re just starting out with sales tax, begin on our step by step page).
In this article, we’ll cover:
1. Introduction to Remittance
2. Tax Remittance Options
3. Weighing Your Options
4. Using a Third Party Service
Introduction to Remittance
Once you’ve determined you have nexus in a state, registered for a sales tax license, and declared nexus on TPT, you’ll need to decide how you want to file your tax returns and remit the sales tax that you collect on TPT. Remitting taxes is the process of delivering your collected sales tax to states where you have sales tax responsibilities.
The frequency of this filing and remitting process may vary by state and tax amount, so be sure to find out more about your responsibilities on state websites.
You can find sales tax information relevant to your store on both the Sales Details tab and the Transactions by State tab (we’ll be adding more information to this tab by February). You can use this information to understand how much sales tax is collected on TPT on a state-by-state basis. Learn more about how we’ve updated these reports.
Tax Remittance Options
There are a few options and services you can consider for filing and remitting your taxes. You can manually file and remit to states yourself, or you can use a third party service like TaxJar or Avalara TrustFile, which we’ll discuss below. Each option will vary in terms of how much time, effort, and cost it may require.
Manual Remittance
To manually remit your taxes you can reference the Sales Details and Transactions by State reports to determine how much sales tax was collected on TPT. If applicable, remember that remitting taxes to a state may involve all sales made in the state, including sales made on platforms outside of TPT. After locating your sales tax information, you would identify and prepare the applicable state return form(s), file the form(s) and remit taxes online or by mail.
If you’re remitting to multiple states, this option may be more time consuming. Additionally, you may need to sort data or create a pivot table in Excel if your state’s return form requires a county- or city-level breakdown. Visit our FAQ page for instructions.
Remittance Via TaxJar
TaxJar provides a paid manual remittance option that might make it easier for you to prepare your tax return. If you’re remitting in states with more complicated return forms, like states that require county- or city-level details, TaxJar will provide a county- or city-level breakdown for you. Additionally, if you have sales from multiple platforms, TaxJar will aggregate all the sales across these different platforms for you.
With the manual option from TaxJar, you would first download a report from TPT that includes your TPT sales and tax information. Next, you would upload this report to TaxJar (remember that if you’re selling on other platforms, you’ll need that information too). TaxJar will analyze your transactions and provide you with the numbers needed to prepare your tax return. Last, you would need to complete the return forms, file them, and remit the money (this part of the process is the same as if you weren’t using TaxJar).
TaxJar also provides a paid “autofile” option that may save you time, but we discourage using this option. Be aware that TaxJar autofile may have you remit more or less than what was collected on TPT. This is due to a different approach to calculating how much tax should be remitted. TaxJar autofile may have you remit less than what was collected, but you are still responsible for remitting the entire amount of tax collected from TPT on your behalf to the relevant state. Or, it may have you remit more than what was collected on TPT, and that amount would be automatically remitted from your bank account. As a result, we don’t recommend using TaxJar autofile.
Remittance Via Avalara TrustFile
This paid option from TrustFile may save you time, especially if you have to file and remit in multiple states. After downloading your sales tax information from TPT (and other platforms, if applicable) and uploading it to TrustFile, they will identify the state return forms and complete them for you based on the report(s) you upload. This option will also file the form(s) and remit taxes for you from a linked bank account (you’ll have the option of turning automatic filing on or off).
This option is less time consuming than manually remitting, since filing and remitting happens automatically. Additionally, this option does not require you to sort or pivot in Excel since TrustFile will fill out the tax return with the appropriate county- or city-level breakdown if needed.
Keep in mind that if you’re using TaxJar or TrustFile, you’ll still need to download a report from TPT and upload it to TaxJar or TrustFile for each filing period.
Take a look at the side-by-side comparison of the remittance process using the options listed above:
Note that while we’ve included TaxJar’s autofile option in the chart for comparison purposes, we discourage using this option because it may direct you to remit more or less than what TPT collected from buyers on your behalf.
Weighing Your Options
It’s important to consider how many states you’re remitting to before selecting an option that is best for you. Remitting to multiple states can become very time consuming, so if you’re remitting to multiple states it may be in your best interest to choose an option that simplifies the process. If you have more questions about which option is right for you, reach out to TaxJar or TrustFile to learn more about their services.
Whichever option you choose, please remember that these are your personal tax obligations. You are responsible for the remittances that you make to a state, so you should be sure you are comfortable with the option you decide upon.
Using a Third Party Service
If you’re using TaxJar or TrustFile to help you file and remit the sales tax you’ve collected on TPT, you can use the “Sales Tax Exports” tab on your Sales Reports page to generate and download a report that is compatible with TaxJar or TrustFile.