Sample Protocol: Sales And Use Tax Return - Minnesota Council Of Nonprofits printable pdf download

Minnesota Council of Nonprofits

Protocol: Sales and Use Tax Return

Adopted: November 22, 2009

Revised: February 2, 2010

Purpose:

This protocol provides instructions for filing MCN’s quarterly sales and use tax return and

paying the tax due.

Protocol:

Quarterly returns are due on the 20

of the month following the end of the quarter. Therefore the

return must be filed and tax paid by:

· January 20 – for the last quarter of the previous year

· April 20 – for the first quarter of the current year

· July 20 – for the second quarter of the current year

· October 20 – for the third quarter of the current year

Filing the return and paying the tax due should be completed during the month-end close

procedures for the month (if applicable).

To capture the data necessary for completing the quarterly return, a spreadsheet has been created.

Before entering the data below, confirm the current sales tax rate (and update if necessary) and

also enter the quarter for which the spreadsheet is being produced. In the spreadsheet, the fields

that will need to be updated by following this protocol are highlighted. The rest of the fields are

descriptive or are auto-calculations through formulas.

STEP ONE: Determine the sales tax collected over the previous quarter

Note: This protocol is based on the fact that all purchases are assumed taxable unless MCN has

a completed ST-3 on file for the purchaser. (See related ST-3 form collections protocol.) After a

completed and legally compliant ST-3 is collected, the purchaser’s five digit exempt number

(ES#) or seven digit Minnesota tax ID number is entered into MCN’s database which controls

purchases on all items upon which sales tax may be charged. Sales tax is automatically charged

by the system unless a tax exempt ID number has been entered into the purchaser’s database

record. A tax exempt ID number is ONLY added to the database after a completed and legally

compliant ST-3 form has been received, reviewed by the accountant, and then filed with all

collected ST-3s. For taxable purchases, sales tax is collected and accrued in a liability account

(#237).

To determine the amount of sales tax collected for the applicable quarter:

Pull a quick report for the sales tax account -- #237 – for the applicable quarter.

Ensure that the last payment made for sales tax zeroed out the account at the end of

the last period for which sales tax was paid. (For example, on 12.30.08, the balance

Sample Protocol: Sales And Use Tax Return - Minnesota Council Of Nonprofits