If you start collecting tax in a new region, make sure that you're filing returns and remitting tax in that region as well. Keep track of how your business changes in different regions to determine which forms you need to be filing, and how often. When you need to update returns that you've already set up, edit the return form to include whatever changes need to be made.
Identify regions where you're collecting but not filing
To see regions where you're collecting tax but don't have return forms scheduled to be filed in Returns, go to Returns > Schedule and approve returns.
This page lists both regions where you've scheduled returns to be filed, and regions where you might need to file returns but haven't scheduled anything yet. Regions that may require your attention are marked with yellow warning icons letting you know that you might need to file in the jurisdiction, set up a new return form, or finish filling out incomplete forms. Click Details next to a region to see what forms you might be missing there.
If you aren't using Returns to file your taxes in a region and are instead filing on your own, then you're already compliant with tax law and you can ignore the warning message on this page for that region. Otherwise, if you're not filing returns in a region where you're collecting tax, set up a return form for that jurisdiction.
Understand and resolve your compliance risks
You need to collect and remit tax in every jurisdiction where you're registered to do so.
If you’ve begun collecting taxes in a jurisdiction without being registered, you need to act fast to get yourself registered. Tax collection requires sellers to obtain authorization to collect tax from the relevant taxing authority, usually in the form of a tax license or permit. Failing to do so before collecting tax is a serious matter, regardless of the amount. If you determine that this may be the case, contact your account manager to discuss how Avalara can help you remedy the situation.
If you’re collecting tax on behalf of the taxing authority, with the appropriate registration and permits, but are failing to file and remit payments, then you likely need to backfile missed taxes. Contact your account manager to discuss how Avalara can help you with backfiling returns and submitting payments to the appropriate jurisdiction. You may have to pay late fees, penalties, or interest in addition to the value of any returns you should have filed previously.
If taxing authorities discover you’re non-compliant through either of these scenarios, it can lead to penalties, fines, and in some cases imprisonment for those involved in the unauthorized tax collection process. If you have any questions, concerns, or want to talk further about your options, contact your account manager.
Get professional tax support
Collecting taxes and not filing can put your business at risk. If you’ve identified a compliance risk, it is important to act right away. The Avalara Tax Advisory Services team is here to help you with registering in new jurisdictions, backfiling missed returns, completing voluntary disclosure agreements, and much more. If you want more information about working with the Avalara Tax Advisory Services team, contact your account manager.