27 States That Pay You for Filing Sales Tax on Time
You might be leaving money on the table
If you file your sales tax return on time, 27 states will let you keep a small percentage of the tax you collected. It's called a "vendor discount" or "timely filing discount," and it exists because the state recognizes you're doing work on their behalf — collecting tax from your customers and sending it in.
The discount is small per filing — usually 1–3% of the tax collected. But over a year, it adds up to hundreds or even thousands of dollars. And most small business owners have no idea it exists.
The states that offer vendor discounts
Here are the 27 states that currently offer a timely filing discount. Rates and caps vary:
Alabama — 5% of the first $100, then 2% over $100 (max $400/month)
Arizona — 1% of tax due (max $10,000/year)
Colorado — 3.33% of state tax collected (no cap)
Florida — 2.5% of the first $1,200 collected, scaling down after that
Georgia — 3% of the first $3,000 due, then 0.5% on amounts over $3,000
Idaho — Allow up to $2,200/year in compensation
Illinois — 1.75% of tax collected
Indiana — 0.73% of tax collected (max $1,000/year)
Iowa — 1.5% of tax collected (may sunset)
Kentucky — 1.75% of first $1,000, then 1.5% on amounts over $1,000
Louisiana — varies by parish; state portion is typically 1.1%
Maryland — 1.2% of tax collected (max varies)
Michigan — 0.5% of tax collected (max $15,000/year)
Missouri — 2% of tax collected
Nebraska — 2.5% of first $3,000, then 0.5% on amounts over $3,000
New Mexico — reimburses up to $7,500/year through a vendor compensation program
North Carolina — allows deduction for timely filing under certain conditions
North Dakota — 1.5% of tax collected (max $110/month)
Ohio — 0.75% of tax collected
Oklahoma — 1% for monthly filers, 2% for semi-annual (max $2,500/year)
Pennsylvania — 1% of tax collected (max $25/month for most filers)
South Carolina — 3% of tax due (max $3,300/year)
South Dakota — 1.5% of tax due for amounts under $100, then 1% on amounts over $100
Tennessee — 2% of first $2,500, subject to conditions
Texas — 0.5% of tax collected (max $5,000/filing period)
Vermont — varies; check current guidelines
Virginia — allows dealers a compensation deduction for timely filing
What this means in real dollars
Let's say you're a restaurant in South Carolina collecting $4,000/month in sales tax. Your vendor discount is 3% of the tax due, which is $120/month — $1,440/year.
Or you're a retail shop in Georgia collecting $2,500/quarter. Your discount is 3% of $2,500, which is $75/quarter — $300/year.
Or you're a bar in Colorado collecting $6,000/month. At 3.33%, your discount is about $200/month — $2,400/year.
File one day late, and you lose the entire discount for that period.
Why most businesses miss the discount
Two reasons. First, many business owners simply don't know the discount exists. It's not something the state advertises. Second, claiming the discount requires filing on time — and for businesses still doing manual filing, deadlines slip.
TaxAside captures your vendor discount automatically
TaxAside claims the vendor discount on your behalf in every state that offers one. We file on time, apply the discount, and you keep the savings. It's included with every plan — no extra setup required.
Check your state's tax guide to see your specific vendor discount, or start your free trial and we'll capture it for you automatically.