Overview
You don't need to wait for a tax registration to be approved before Anrok starts calculating tax on your transactions. Once you've submitted a registration application, you can choose to have Anrok start collecting tax in that jurisdiction while the application is still pending, so you don't build up uncollected exposure during the processing window.
Registration timelines vary widely. Some jurisdictions issue a permit within days, while others, and many countries, can take weeks or months. If you cross a jurisdiction's economic nexus threshold or otherwise become obligated to collect, your obligation generally begins when you meet the threshold, not when the registration is approved. Collecting tax during the processing period helps you:
- Avoid having to absorb the tax yourself on sales made while you wait.
- Avoid going back to customers later to recover tax you should have collected.
- Keep your records accurate from the date your obligation began.
Important
In most states and countries, tax collection is generally expected to begin only after approval and your tax permit has been issued by the government. By choosing a collection start date, you're confirming you'll collect tax from that date regardless of your registration status. You're responsible for ensuring the date is accurate and following up on your registration so it's ultimately processed and the collected funds can be remitted to the jurisdiction.
How collection works before registration approval
By inputting a tax collection start date into Anrok, you're directing Anrok to begin charging tax as of that date. If you choose to set a specific date, you'll begin collecting tax from customers on that date regardless of the status of your registration. When a specific date is selected, your tax calculation start date is set to match your tax collection start date by default.
Note
There is also a the Advanced setting, where you can set a custom tax calculation start date separate from your tax collection start date. If your tax calculation start date is before your tax collection start date, tax calculated on transactions is in a Paid by seller status. You might choose this option if you want to inform your customers of sales tax collection changes before collection begins.
In a Paid by seller status, Anrok calculates sales tax but doesn't add the calculated amount to customer-facing invoices. You absorb that sales tax cost and pay it on your customer's behalf. Transaction tax amounts are marked with an asterisk (*) to indicate that you're responsible for paying the tax.
Tax collected on behalf of a jurisdiction isn't your revenue. It belongs to the state or country, and you hold it in trust until it can be remitted. Until your registration is approved, Anrok tracks the tax you've collected for that jurisdiction, but there's no account to remit it to yet.
Transactions where Anrok calculated tax before your registration is complete have an status, since there are no returns available to associate them with. Once your registration is complete and your first returns are generated, these transactions are automatically added to the applicable returns.
Once your registration is active and your registration details are set up in Anrok, you can file and remit the accumulated tax, along with any applicable returns, for the periods that were pending.
Keep following up on your registration
Collecting tax while a registration is pending is a temporary bridge, not a long-term plan. It's important that you actively follow up on any pending registration until it's approved. Keep in mind:
- You can't hold collected tax indefinitely — The longer the registration stays unresolved, the larger the balance you owe to the jurisdiction grows. Jurisdictions expect collected tax to be remitted, and holding it for an extended period can create compliance risk.
- Late filing and payment consequences may apply — Depending on the jurisdiction, penalties and interest may begin to accrue from the original due dates, even if the delay was caused by registration processing.
- Applications can stall — Missing information, unanswered agency requests, or mailed correspondence that never reaches you are common reasons registrations stall. Check the status of your application regularly and respond to agency requests promptly.
See Check-in on processing registrations.
Frequently asked questions
Does Anrok hold the tax I collect?No. Tax collected from your customers stays with you until it's remitted to the jurisdiction. Anrok calculates and tracks the tax and doesn't hold your funds. |
What if my registration is denied or takes much longer than expected?The Anrok registrations team is monitoring your application and sends status updates. Review these and reply as soon as possible to any information requests to keep your application moving smoothly. In some jurisdictions, other tax obligations (income tax, withholding tax, property tax, etc.) can stall an application. |
What if I started collecting tax and decide to stop my registration?The money collected isn't yours; you hold it in trust for the jurisdiction. If you choose to pause your registration or not register but have already collected from your customers, you must return these amounts to your customers. |