Explain how to calculate sales tax, tips, and discounts. What is similar and different about these processes? -w-

Sales tax is one of many types of small business taxes that entrepreneurs are responsible for paying. Forty-five states and Washington D.C. all have sales tax. States use this money to pay for budget items like schools, roads, and public safety.

Businesses that sell a product or a taxable service must collect sales tax from their customers. The processes of calculating the correct sales tax rates, collecting payment, submitting sales tax returns, and paying the tax can be very time consuming, particularly for first-time business owners. This is particularly so if you sell multiples types of products or operate in multiple states.

To help you sort things out, we’ll cover the steps involved in collecting, reporting, and paying sales tax. We’ll start out by helping you figure out if your product or service is subject to sales tax. After reading this, you should feel much more confident in reporting and paying your sales taxes.