These States Provide a Sales Tax Discount!

Dec 6, 2023 | Blog Posts

Some states give retailers a sales tax discount if you file and pay on time. Find out which states and how much the discount is here.

Collecting and filing sales tax is a thankless task. As a retailer, you collect it from your buyers and pass it straight on to the state. While it sits in your account for a month or a quarter, you don’t get to keep it. 

A few heroic states, though, understand that you are taking on an administrative hassle. And they offer “timely filing discounts” to sales taxpayers who pay on time. 

States call these different things: credits, discounts, allowances, etc. But they generally amount to allowing taxpayers to keep a (very) small percentage of the sales tax you collected, as long as you file correctly and on time. Sales tax discounts are often just a percentage point or two of the tax you collected, and the discounts often max out at something like $30 or $50 per filing period. But some states are more generous than others.

And in even better news, if you file online, the state generally calculates your discount for you, so you don’t even have to do the math!

Below we’ve collected each state’s current timely filing sales tax discount. Note that these were all current at the time of this writing, but sales tax discounts may change. Always check with the state if you notice any discrepancy with your sales tax filing. Or better yet, contact the sales tax experts at HOST who will ensure you get every discount and credit due to you.

State Sales Tax Timely Filing Discount
Alabama 5% of the first $100 of tax due and 2% of any excess amount. Maximum timely filing discount is $400 per month.
Arizona Credit allowed equal to 1% of tax due, not to exceed $10,000 per calendar year.
Arkansas 2% of tax due. Maximum timely filing discount is $1,000 per month.
Florida 2.5% of the first $1,200 of tax due. Discount is not to exceed $30.
Georgia 3% of the first $3,000 of tax due and 0.5% of any excess amount.
Illinois Timely filing discount is the greater of 1.75% of tax due or $5 per calendar year.
Indiana If total annual sales tax collected is less than $60,000, then discount is 0.83%. If total annual sales tax collected is between $60,000 and $600,000, then discount is 0.6%. If total annual sales tax collected is more than $600,000, then discount is 0.3%.
Kentucky 1.75% of the first $1,000 of tax due and 1.5% on any excess. Maximum discount of $50 per month. 
Louisiana 1.5% of tax due. 
Maryland Credit equal to 1.2% of the first $6,000 of tax due and 0.9% of excess. Discount limited to $500 per return, or $500 for all returns for vendors eligible to file consolidated returns.
Michigan Discount can depend on how early you pay sales tax. The vendor (seller) may deduct greater of: 

  1. for payments made before the 12th day of the month, 0.75% of tax due at a rate of 4% for the preceding month (maximum $20,000 of tax due); for payments made between the 12th and the 20th, 0.5% of the tax due at a rate of 4% for the preceding month (maximum $15,000 of tax due); or 
  2. the tax collected at a rate of 4% on $150 of taxable purchase price for the prior month.
Mississippi 2% of tax due. Discount maxes out at $50 per month and $600 per year.
Missouri 2% of tax due.
Nebraska 3.0% of the first $5,000 in sales tax remitted each month.
Nevada 0.25% of tax due.
New York Credit equal to 5% of tax due. Maximum discount of $200 per quarterly (or longer) period.
North Dakota 1.5% of tax due. Maximum discount of $110 per month
Ohio 0.75% of tax due.
Pennsylvania Discount is the lesser of: 

  1. 1% of the amount of tax collected or
  2. $25 per return for a monthly filer, $75 per return for a quarterly filer, or $150 per return for a semiannual filer.
South Carolina Discount varies. 2% of tax due (but 3% if tax due if less than $100). The maximum discount is $3,000 per year, but raises to $3,100 if filing electronically, and $10,000 for out-of-state taxpayers filing voluntarily.
Tennessee Discount only applies to out of state sellers filing voluntarily. Discount is 2% of the first $2,500 and 1.15% of the excess amount per report.
Texas 0.5% of tax due plus 1.25% of the amount of any prepaid tax.
Utah 1.31% of state tax and 1% of local, public transit, and municipal energy sales and use tax. Discount only applies to certain monthly filers.
Virginia 3% (4% food tax) if monthly taxable sales are less than $62,501; 2.25% (3% food tax) if $62,501 to $208,000; 1.5% (2% food tax) if over $208,000.
Wisconsin 0.5% of the tax payable on retail sales or $10, whichever is greater, up to $1,000 for each reporting period, and not to exceed tax liability. Certified service providers are ineligible for timely filing discounts.
Wyoming Early payment credit, 1.95% of first $6,250 of taxes due, then 1% of the amount in excess of $6,250. The maximum credit is $500 per month.