Due to action by this year’s General Assembly many more retailers will be subject to the Accelerated Sales Tax payments in June. The law previously had required dealers or permit holders with $26 million or more in annual taxable sales and purchases (for the previously 12 month period — in this case the period ending June 30, 2014) to report and pay early. However, with the change this year, dealers and permit holders with just $2.5 million in taxable sales and purchases will be required to report early.
The Accelerated Sales Tax program requires dealers and permit holders to report and pay 90 percent of the tax liability for the previous June (June 2014 in this case) taxable sales and purchases by June 25, 2015 (for payment with checks) and June 28, 2015 (for electronic filers). This accelerated payment is in addition to having to report their May 2015 payments which are due June 20, 2015. The accelerated payment will offset the liability or payments due for the month of June 2015 which are to be reported by July 20, 2015. Thus, if a dealer made an accelerated payment of tax of $10,000 and his liability for June 2015 was $11,000, he would remit only $1,000 to the Department of Taxation with his payment for June 2015 (due July 20, 2015). On the other hand, if the accelerated payment exceeds the actual liability due, the dealer will be allowed a credit against its July 2015 payment (due August 20, 2015).
While the Department of Taxation will notify affected dealers of this change, this alert is provided to make certain businesses are aware as a lot more businesses will be affected by this change.
It is noteworthy too, that while the Accelerated Sales Tax Program was scheduled to be phased out over the years until completely gone by June 2021 it appears to have been made permanent … until next year when it could be changed again.
If you have questions about this, please contact your Keiter advisor.
Source: Sec. 3-5.07 of the 2015 Appropriation Act (Budget Bill, HB 1400; Ch. 665, 2015 Acts of Assembly)
The information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.