By Keiter CPAs
Should retailers continue standard sales tax calculations despite changes to cash transactions?
The Streamlined Sales Tax (SST) Governing Board has issued guidance on sales tax calculation following the U.S. Treasury’s elimination of the penny.
Sales tax calculation requirements remain unchanged
Retailers are required to calculate sales tax by multiplying the taxable sales price by the applicable sales tax rate. The resulting amount should be carried to the third decimal place and rounded to the nearest cent, rounding up whenever the third decimal exceeds four. This method does not change based on the type of payment used.
For cash transactions, if exact change cannot be provided due to a penny shortage, retailers may need to round the total amount due to the nearest nickel. This adjustment applies only to the final transaction amount and does not affect the calculation of sales tax.
Retailers should also be aware that other state and federal laws unrelated to sales tax may impact any rounding policy.
At this time, all SST member states, including Virginia, have approved the guidance for publication. The only exception is Arkansas, which has not yet given their approval. Keiter can help your organization ensure your sales tax processes remain accurate and compliant. Reach out to your Keiter Opportunity Advisor or Email | Call 804.747.0000
Source:
Thomson Reuters®| Checkpoint
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