Sales and use tax can be a very confusing topic. It is also an area the Wisconsin Department of Revenue likes to audit. Below are a few quick tips to help ensure you are complying with the sales and use tax rules.
- Collect and document exemption certificates: There may be times when you do not collect sales tax from your customers because they have exemption certificates. When a customer presents you with an exemption certificate, you should document the certificate by scanning or making a copy of it just in case you are audited in the future.
- Properly report use tax: When a business or a person purchases a product from out of state without paying sales tax, they may be required to pay use tax. Make sure you properly report the amount of use tax you owe on these purchases.
- Ensure total sales reported on the income tax return equals total sales reported on the sales tax forms: If these total sales amount differ, the Wisconsin Department of Revenue may investigate.
- Make sure you are collecting correct amount of sales tax: Wisconsin charges a 5% sales tax rate. In addition, some counties in Wisconsin charge their own sales tax rate of 0.5%. This means some sales are subject to a 5.5% sales tax rate. Make sure you are applying the correct sales tax rate.
I hope these tips help. Please feel free to contact us if you have any questions – Jimmy@focus-cpa.com or 920-351-4842.