Hello!
Whatever you do, do it quickly! I have an almost ten year old daughter that I did not sit on. I thought she would outgrow it. I didn't have anyone to ask advice from so I just did what I thought I should have, which was not effective. It is far more difficult to deal with a sassy mouth when the child gets older. It has become who my daughter is and it is very difficult to help and encourage her to not speak with the tone that she does.
As for my other two (5 and 7), I was able to get past the sassy tone by not letting it slide. My 5 year old still speaks that way occasionally. I get down on her level and say "You may NOT talk to me that way. That is not how we talk to a Mommy or any else". She says "sooooooorrrrrryyyy" and changes her tone and moves on. I don't put her in time out because once I say something, firmly, it's done with.
I have to say that it probably also has a lot to do with the child's personality as well. My two younger girls are very shy and have a more calm attitude. My older daughter has an energetic and spunky attitude. She is just extreme on ALL levels. She is great at school, very outgoing, in student council, and is always the first to raise her hand in class. Very confident in herself and has no fear of anything. So the sassy attitude, while not acceptable, makes sense being that she's "over the top" in all areas of her life.
You may just have a strong willed child on your hands and the best thing you can do is get it under control so that you can point her in the right direction.
Best wishes and tons of hugs!!