- [Instructor] For internet businesses
and other business operating in multiple states,
the challenge of sales taxes becomes much more acute.
Any business with multiple locations faces this challenge
to some degree, though.
And that means that organizing
and tracking sales payments is more of an issue.
Let's take a look
at how we might modify our sales tax ledger
for an entity with two locations in separate states.
So what we have here is a basic sales tax ledger.
And this lets us aggregate the sales each month
for each location.
And it also records the amount that we pay in sales taxes.
So at Location 1,
in a particular state,
we pay a particular amount.
And we've recorded the amount that we've paid
in each month for that location.
And we've separated out the amount
that we pay in sales taxes.
So column B includes the sales for that particular location,
Location 1 in this case,
column C is the date that we paid sales taxes,
and then column D is the amount that we paid
in sales taxes for Location 1 in state one.
Now, we go through and in columns E through G,
we create a separate sales ledger.
This is for Location 2 located in state two.
So in this case, our sales vary somewhat.
And we are now recording our second set of sales,
again for each location,
and we pay on similar dates,
we probably do our sales tax filings
for both states on the same day in most cases,
but we have a separate column recording the amount
that we have paid for Location 2.
So column E tells us the sales for Location 2,
column F tells us the date we paid that sales tax,
and column G tells us the amount that we paid
in sales taxes for that month.
Now, when we're dealing with internet businesses
or businesses with multiple jurisdictions,
this gets to be a real challenge.
There are special types of software
that make the sales tax burden less time-consuming
for businesses, especially for those
where they're dealing with multiple tax jurisdictions.
But whether you opt to use that kind of software or not,
you should now understand conceptually the importance
of keeping records for separate locations
so that you can prove the amount that you owed
in each jurisdiction versus the amount that was paid.