Which payment method should you use to pay sales tax? - TaxJar

Which payment method should you use to pay sales tax? - TaxJar

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Resources Sales Tax Fundamentals

by TaxJar December 1, 2024

Ditch the sales tax complexity.

Can you pay sales tax with a credit card? How about paying sales tax with cash? These are just some of the questions that e-commerce businesses ask when it comes time to actually remit sales tax you’ve collected back to the state.

To answer that, we researched every state to discover what payment methods they accept.

But before we get to the list, we did notice a few trends.

Many states are phasing out, or already have phased out, payment by cash, check or money order in favor of recruiting taxpayers to pay their sales tax bills by Electronic Funds Transfer (EFT). Arizona, for example, requires most taxpayers to pay via EFT. If a taxpayer elects not to, they’ll be hit with a 5% penalty. Ouch! Be on the lookout for notifications from your state and be prepared to begin paying via EFT. If you really need to pay with cash or a check, we recommend contacting your state’s taxing authority to request a waiver.

The Automated Clearinghouse Network (ACH) is a very popular form of electronic funds transfer (EFT). To put it another way, all ACH transactions are a form of electronic funds transfer (AKA EFT,) but not all EFT transactions are powered by ACH.

Some states allow you to pay via ACH Debit or via ACH Credit, but what does that mean exactly?

ACH Debit transactions are typically free, while ACH Credit transfers often come with a fee of up to $3. To initiate an ACH Credit you may even need to contact your bank. For that reason, ACH Debit is generally more commonly used.

A note on this table: Payment information can be surprisingly hard to find outside of the privacy of a state’s taxpayer portal. We’ve included links in this table if states provide public information about payment methods.

Also please note that some states provide public information about the many methods you can use to pay personal tax such as income tax, but not business tax like sales tax. We tried to be as thorough and accurate as possible here, but if you see a mistake or that something has changed, feel free to leave us a message in the comments and we’ll get that updated.

from checking or savings

(Convenience fee may apply)

(No convenience fee if paying through LATap – Louisiana Taxpayer Access Point website)

from checking or savings (depending on your bank)

Convenience fee is 2%

check, money order or cashier’s check

(Note: The state is phasing this out in favor of EFT only)

by check, money order or cashier’s check (Note: The state is phasing this out in favor of EFT only)

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