OLR Research Report


August 19, 2013

 

2013-R-0326

SALES TAX FILING FREQUENCY IN SELECT STATES

By: Rute Pinho, Associate Analyst

You asked us to compare sales tax filing frequencies in the Northeast states (New England, New Jersey, and New York).

All of the Northeast states, except New Hampshire, set a default filing frequency for new sales tax remitters (i.e., sellers) and varying filing frequencies for sellers whose sales tax liability meets certain thresholds. (New Hampshire does not impose a broad-based sales tax.) As Table 1 shows, three states (Connecticut, New Jersey, and New York) require new sellers to file on a quarterly basis, while three other states (Maine, Rhode Island, and Vermont) require them to do so on a monthly basis. Massachusetts, on the other hand, allows sellers to choose their filing frequency when they remit their first sales tax return, based on their estimated sales tax liability.

The states also require sellers to adjust their sales tax filing frequency if their liability meets certain thresholds, which vary by state. For example, all of the states require sellers to remit sales taxes on a monthly basis if their liability is over a certain amount. Massachusetts sets the lowest threshold for monthly filers ($1,201 or more per year), while New York sets the highest (taxable receipts of $300,000 or more in a quarter). Similarly, five of the states require sellers to remit sales taxes on an annual basis if their liability is under a certain amount. Maine sets the lowest threshold for annual filers (under $50 per year), while New York sets the highest ($3,000 or less per year).

The states also vary in the number of filing frequencies they prescribe (e.g., monthly, quarterly, biannually, or annually). One state (Maine) has four sales tax filing frequencies, four states (Connecticut, Massachusetts, New York, and Vermont) have three, and two states (New Jersey and Rhode Island) have two.

TABLE 1: SALES TAX FILING FREQUENCY IN NORTHEAST STATES

State

Default Filing Frequency

Filing Frequency Based on Sales Tax Liability

Monthly

Quarterly

Biannually

Annually

CONNECTICUT

(CGS 12-414 and Conn. Agencies Regs. 12-426-24)

Quarterly

More than $4,000 for the prior 12-month period

Between $1,000 and $4,000 for the prior 12-month period

N/A

Less than $1,000 for the prior 12-month period

MAINE1

(Code Me. R. 18-125, Ch. 304)

Monthly

$600 or more per month

Between $100 and $600 per month

At least $50 per year but less than $100 per month

Less than $50 per year

MASSACHUSETTS

(830 Mass. Code Regs. 62C.16.2)

None- filer chooses frequency when filing first return based on estimated liability

$1,201 or more per year

Between $101 and $1,200 per year

N/A

$100 or less per year

NEW JERSEY

(N.J. Admin. Code 18:24-11.2)

Quarterly

More than $500 per month for the first or second month of a quarterly filing period

Up to $500 per month

N/A

N/A

NEW YORK2

(N.Y. Comp. Codes R. & Regs. tit. 20, 533.3)

Quarterly

Taxable receipts are $300,000 or more in a quarter

Taxable receipts are less than $300,000 during the previous quarter

N/A

$3,000 or less per year

RHODE ISLAND

(R.I. Gen. Laws Ann. 44-19-10)

Monthly

More than $200 per month for six consecutive months

Less than $200 per month for six consecutive months

N/A

N/A

VERMONT

(Vt. Stat. Ann. tit. 32, 9775)

Monthly

$2,500 or more for the preceding calendar year

Between $501 and $2,500 for the preceding calendar year

N/A

$500 or less for the preceding calendar year

1 Seasonal filers are not required to file returns for any off-season reporting period during which they are not engaged in business.

2 Certain sellers (generally those with an annual sales and use tax liability of more than $500,000) must remit the tax on an accelerated monthly schedule and file a quarterly return that reconciles the payments for the previous quarter (i.e., PrompTax).

Source: Individual state statutes, regulations, and tax department websites.

RP:ts