Timely filing discounts by state
Examples of State Discounts for Timely Sales Tax Filing
Various states offer incentives for businesses that file and remit their sales taxes on time. These discounts can significantly reduce the tax burden and improve cash flow for businesses. Below is a detailed list of state-specific discounts available for timely sales tax filing.
For states not listed below, it means that the state does not offer a statewide vendor discount for timely filing.
Alabama
General Sales Tax: 5% on the first $100 of tax due, and 2% on all tax over $100, with a monthly cap of $400.
Simplified Sellers Use Tax: 2% discount on the first $400,000 of taxes collected and remitted, not to exceed $8,000 per month.
Electronic Payment Requirement: Payments must be transmitted by 4:00 p.m. (CT) on the due date to be considered timely.
Alaska
Kenai Peninsula Borough: Offers a 5% on-time credit, limited to $1,000 per quarter.
Arizona
Transaction Privilege Tax (TPT): Paper filers can claim a 1% credit up to $10,000 annually; electronic filers can claim 1.2% up to $12,000 annually, provided all TPT returns are filed electronically.
Arkansas
Local Sales Tax: 2% discount up to $1,000 per month for each city and county reported.
Colorado
General Sales Tax: 4% of the tax due, up to $1,000 per filing period. Not available to businesses with taxable sales exceeding $1 million during the filing period.
Local Option Sales Tax: Service fee for timely filing ranges from 0% to 4%.
Florida
General Sales Tax: 2.5% of the first $1,200 due, with a maximum discount of $30 per report. Available only for electronic filers.
Georgia
General Sales Tax: 3% on the first $3,000 of combined state and local sales and use tax, then 0.5% on the remainder.
Illinois
General Sales Tax: $5 or 1.75% of the tax collected on sales of tangible personal property, whichever is greater. Electronic filing is required to receive the collection allowance.
Indiana
Retail Merchant’s Collection Allowance: 1% discount on collected taxes, promoting timely electronic filing.
Kansas
Retailers’ Compensating Use Tax: Discounts for vendors in neighboring states, e.g., Missouri (2%), Nebraska (2.5% up to the first $3,000), and Oklahoma (1%).
Kentucky
General Sales Tax:1.75% on the first $1,000, then 1.5% on the remainder, with a maximum of $50 per month.
Louisiana
General Sales Tax: 1.05% of the total sales and use taxes due, limited to $1,500 per month.
Maryland
General Sales Tax: 1.2% on the first $6,000 collected, and 0.9% on the amount above $6,000, with a maximum of $500 per return.
Michigan
General Sales Tax:Discount varies based on when tax is remitted, with incentives for early payment.
Mississippi
General Sales Tax: 2% discount, capped at $50 per month and $600 per year.
Missouri
General Sales Tax: 2% timely payment allowance if the return is postmarked before the due date.
Nebraska
General Sales Tax: 3% of the first $5,000 of sales tax collected each month, with a maximum of $150 per month, per location.
Nevada
General Sales Tax: 0.25% of state sales tax collected.
New York
General Sales Tax: 5% vendor collection credit for quarterly and annual filers, with a maximum of $200 per reporting period.
North Dakota
General Sales Tax: 1.5% discount, capped at $110 per month.
Ohio
General Sales Tax: 0.75% of the tax liability reported, encouraging timely electronic filings.
Pennsylvania
General Sales Tax: Cap imposed post-August 2016, allowing for modest monthly, quarterly, or semi-annual discounts.
South Carolina
General Sales Tax: 3% discount on total tax due less than $100, and 2% on total tax due of $100 or more. The maximum discount is $3,100 per fiscal year for electronic filers.
Tennessee
Vendor Compensation Deduction: For out-of-state businesses that file on time, 2% of the first $2,500 of state tax due, and 1.15% of the amount over $2,500.
Texas
General Sales Tax: 0.5% discount, with an additional 1.25% for prepayments.
Utah
General Sales Tax: Discounts vary for monthly filers and new non-nexus sellers, with incentives for electronic filing.
Virginia
General Sales Tax: Discount varies based on monthly taxable sales, with compensation rates of 0.8%, 1.2%, or 1.6% of the first 3% of the state tax due.
Wisconsin
General Sales Tax: Retailer’s discount of 0.5% or $10, whichever is greater, encouraging timely and accurate tax filing.
Wyoming
General Sales Tax: Early payment credit of 1.95% on the first $6,250 of taxes due, with a 1% credit on the excess amount, capped at $500 per month.
Various states offer incentives for businesses that file and remit their sales taxes on time. These discounts can significantly reduce the tax burden and improve cash flow for businesses. Below is a detailed list of state-specific discounts available for timely sales tax filing.
For states not listed below, it means that the state does not offer a statewide vendor discount for timely filing.
Alabama
General Sales Tax: 5% on the first $100 of tax due, and 2% on all tax over $100, with a monthly cap of $400.
Simplified Sellers Use Tax: 2% discount on the first $400,000 of taxes collected and remitted, not to exceed $8,000 per month.
Electronic Payment Requirement: Payments must be transmitted by 4:00 p.m. (CT) on the due date to be considered timely.
Alaska
Kenai Peninsula Borough: Offers a 5% on-time credit, limited to $1,000 per quarter.
Arizona
Transaction Privilege Tax (TPT): Paper filers can claim a 1% credit up to $10,000 annually; electronic filers can claim 1.2% up to $12,000 annually, provided all TPT returns are filed electronically.
Arkansas
Local Sales Tax: 2% discount up to $1,000 per month for each city and county reported.
Colorado
General Sales Tax: 4% of the tax due, up to $1,000 per filing period. Not available to businesses with taxable sales exceeding $1 million during the filing period.
Local Option Sales Tax: Service fee for timely filing ranges from 0% to 4%.
Florida
General Sales Tax: 2.5% of the first $1,200 due, with a maximum discount of $30 per report. Available only for electronic filers.
Georgia
General Sales Tax: 3% on the first $3,000 of combined state and local sales and use tax, then 0.5% on the remainder.
Illinois
General Sales Tax: $5 or 1.75% of the tax collected on sales of tangible personal property, whichever is greater. Electronic filing is required to receive the collection allowance.
Indiana
Retail Merchant’s Collection Allowance: 1% discount on collected taxes, promoting timely electronic filing.
Kansas
Retailers’ Compensating Use Tax: Discounts for vendors in neighboring states, e.g., Missouri (2%), Nebraska (2.5% up to the first $3,000), and Oklahoma (1%).
Kentucky
General Sales Tax:1.75% on the first $1,000, then 1.5% on the remainder, with a maximum of $50 per month.
Louisiana
General Sales Tax: 1.05% of the total sales and use taxes due, limited to $1,500 per month.
Maryland
General Sales Tax: 1.2% on the first $6,000 collected, and 0.9% on the amount above $6,000, with a maximum of $500 per return.
Michigan
General Sales Tax:Discount varies based on when tax is remitted, with incentives for early payment.
Mississippi
General Sales Tax: 2% discount, capped at $50 per month and $600 per year.
Missouri
General Sales Tax: 2% timely payment allowance if the return is postmarked before the due date.
Nebraska
General Sales Tax: 3% of the first $5,000 of sales tax collected each month, with a maximum of $150 per month, per location.
Nevada
General Sales Tax: 0.25% of state sales tax collected.
New York
General Sales Tax: 5% vendor collection credit for quarterly and annual filers, with a maximum of $200 per reporting period.
North Dakota
General Sales Tax: 1.5% discount, capped at $110 per month.
Ohio
General Sales Tax: 0.75% of the tax liability reported, encouraging timely electronic filings.
Pennsylvania
General Sales Tax: Cap imposed post-August 2016, allowing for modest monthly, quarterly, or semi-annual discounts.
South Carolina
General Sales Tax: 3% discount on total tax due less than $100, and 2% on total tax due of $100 or more. The maximum discount is $3,100 per fiscal year for electronic filers.
Tennessee
Vendor Compensation Deduction: For out-of-state businesses that file on time, 2% of the first $2,500 of state tax due, and 1.15% of the amount over $2,500.
Texas
General Sales Tax: 0.5% discount, with an additional 1.25% for prepayments.
Utah
General Sales Tax: Discounts vary for monthly filers and new non-nexus sellers, with incentives for electronic filing.
Virginia
General Sales Tax: Discount varies based on monthly taxable sales, with compensation rates of 0.8%, 1.2%, or 1.6% of the first 3% of the state tax due.
Wisconsin
General Sales Tax: Retailer’s discount of 0.5% or $10, whichever is greater, encouraging timely and accurate tax filing.
Wyoming
General Sales Tax: Early payment credit of 1.95% on the first $6,250 of taxes due, with a 1% credit on the excess amount, capped at $500 per month.
Updated on: 05/02/2024
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