DATE ISSUED: 07/06/99
ESTIMATED SALES TAX FILING STATUS CHANGES
Effective January 1, 2000, beginning with your December 1999 return, the threshold for paying estimated tax is increased from $100,000 to $200,000. Dealers who have sales and use tax liability of $200,000 or more for the preceding state fiscal year (July 1st through June 30th) must make monthly estimated tax payments the following calendar year. If your total sales and use tax liability does not reach $200,000 for the state fiscal year, you will not be required to make estimated tax payments for the following calendar year. You must determine each year whether or not you are required to make estimated tax payments.
Also, effective January 1, 2000, beginning with your December 1999 return, the factor used to calculate the estimated tax payment is reduced from 66% to 60%. Beginning with the December 1999 return, estimated tax payments must be calculated using the new factor of 60%.
If, because of this change, you are not required to make estimated tax payments in 2000, your last estimated tax payment for 1999 will be on your November 1999 return, due on December 1, 1999, and late after December 20, 1999.
The Electronic Funds Transfer (EFT) and Electronic Data Interchange (EDI) requirements have not changed.
If you are required to make estimated tax payments, your first estimated tax payment for the year 2000 is reported on Line 9 of your December 1999 return. This return is due on January 1, 2000, and late after January 20, 2000. Your EFT must be initiated on or before January 19, 2000, no later than 3:45 p.m., ET.
Record the estimated tax payment made on Line 9 of your December 1999 return on Line 8 of your January 2000 return. If you meet the above threshold for estimated tax you are required to make monthly estimated payments throughout the year 2000.
You must determine each year whether you are required to make estimated tax payments.
HOW TO CALCULATE ESTIMATED TAX
Compute your estimated tax liability by one of the following methods:
Example: When completing your December 1999 return, calculate your average sales tax liability for the 1999 calendar year. To calculate your average, complete the following steps:
Example: When completing your December 1999 return, look at your January 1999 return and multiply the amount from Line 7 (minus any discretionary sales surtax) by 60%. Enter that amount on Line 9.
Example: When completing your December 1999 return, your estimated tax liability is 60% of your sales tax liability (minus any discretionary sales surtax) for the January 2000 return. Enter that amount on Line 9.
DO NOT UNDERESTIMATE. Underpayment of estimated tax will subject you to penalty and interest.