If you do not file or pay your sales tax on time, you will incur a penalty. You may also incur a sales tax penalty if your file is incomplete or underpaid. In Virginia, the penalty is 6% per month added to a maximum of 30%. In North Carolina, there may be a Failure-to-File penalty of a maximum of 25% as well as a Failure-To-Pay penalty of 10%. North Carolina also has the traditional interest penalty. In California, the sales tax penalty includes a straight penalty fine plus interest. Most sales tax penalty interest is based from the due date for filing. The interest rates and specific penalties vary from state-to-state. There are also difference between city and state and between cities within a state. While a sales tax penalty by itself may not increase , the interest penalty does allow the debt to continue to grow. To avoid becoming involved in this situation be sure to collect the right amounts and hand them over within th set time frame. Be sure to have access to a responsible accountant. You may also wish to talk to a tax attorney to understand the finer points of sales tax payments. In this way you should be able to avoid any sales tax penalty.