How to Get a Handle on State Reporting

Delaney McDonald
October 28, 2020

Expanding into new states can be great for your business’ growth, but it comes with added intricacy. Because each state has the authority to regulate the production, sale, and distribution of alcohol within its borders, state reporting can get complicated for alcohol producers and retailers. 

Just how complicated can it get?

When states determine what information and forms are required for filing, there is no template or standard. Some states are straightforward and only require you to submit filings annually, while others can require multiple filings as frequently as monthly. 

These filings can include a sales and use tax return, excise tax return, and shipper return. Keeping track of these filings for one state every month can be overwhelming—let alone for several. Within some state’s returns, they may require DOB of customers to be reported, the carrier that “fulfilled” the order, or even the tracking numbers associated with orders to be reported. Then when you add the step of reviewing which orders money has been collected for, or which orders ship on a monthly basis—things can get complicated quickly with each state shipped to.

So, how do you manage multiple state reporting?

When trying to manage state filing—whether it’s to 5 states or 45—there are varying approaches you can take:

  • File manually on your own. This is the “old school” method—it works for some but not all. If you’re not properly prepared and organized, this approach can quickly spiral into a stressful and time-consuming task trying to track each state’s requirements and timelines. But, if your business only needs to submit reporting in a few states that have simple reporting requirements, this approach can work well and be manageable.
     
  • Use a solution or software to help you file. Having a software that automates and pre-populates information for state reporting can significantly reduce the risk of human error and minimize your time spent on state reporting. With this hybrid approach you still have access to your data in the event of an audit, but the time-consuming tasks of manually filling out forms and keeping track of deadlines are eliminated. This can save your business significant time while maintaining visibility. For example, Carriage House Imports reduced their time spent on reporting from 160 hours a month to about one hour a month by using a solution to help automate their reporting process. 
     
  • Hire a consultant to handle everything. This approach means you’re completely hands off when it comes to your state reporting. This is the most expensive option and can often leave you with the least visibility into your compliance process. There are consultants that specialize in the beverage alcohol industry that you can go to, and they will do everything from data entry to the final submission to the state. 

No matter what approach you choose to manage state reporting, make sure you maintain transparency and control over your compliance process. State reporting doesn’t have to be overly complicated and stressful, but if mismanaged it can lead to some serious consequences—like audits, penalties and fines.

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.

Author

Delaney McDonald

Share This Post

LATAM VAT & Fiscal Reporting
May 20, 2020
Sovos Acquires Taxweb, Extends Tax Determination Capabilities in World’s Most Challenging Compliance Landscape

Earlier this month Sovos announced its second acquisition of 2020, completing our solution for Brazil with an unparalleled offering that solves tax compliance in the place where it is most challenging to do so.  Too many companies doing business in Brazil have been burdened by managing multiple point solutions for continuous transaction controls (CTCs), tax […]

November 25, 2020
Audio Blog: Brexit and VAT

Brexit: What are the Implications for VAT Part I Brexit is set to become reality at the end of December. So, what does it mean for organizations doing business in the UK and the European Union? Turns out, there are several tax implications that will need to be accounted for. In this episode of the […]

E-Invoicing Compliance EMEA Tax Compliance Turkey VAT & Fiscal Reporting
November 25, 2020
Turkey’s Digital Tax Transformation: What is E-Arşiv Invoice?

Companies have begun to transfer financial processes to the digital environment as a result of technological developments in recent years. Business efficiency has increased through the financial processes regulated via e-transformation applications. The e-transformation system in Turkey covers applications such as e-invoice, e-ledger, e-arşiv, e-ticket, e-reconciliation, and e-delivery note. Mandate scope of e-arşiv invoice According […]

EMEA IPT
November 24, 2020
Technology Disconnect in Insurance – Why IPT Needs Prioritising

Many insurers still depend on legacy systems to file insurance premium tax (IPT). Whilst cost is sometimes the reason for this decision, some organisations simply don’t prioritise technology upgrades, instead, choosing to focus on initiatives that improve the customer experience or other business workflows. Can this situation continue? Unlikely for much longer, as more tax […]

Sales & Use Tax United States
November 24, 2020
Dissecting the Rhode Island Economic Nexus Sales Tax

Prior to the South Dakota v. Wayfair, Inc. decision, Rhode Island had already enacted legislation related to economic nexus and remote sellers. Effective August 17, 2017, remote sellers needed to comply with certain registration or notice requirements depending on whether the seller qualified as a “non-collecting retailer,” a “retail sale facilitator,” or a “referrer.” Depending […]

Sales & Use Tax United States
November 23, 2020
Yes, there are Sales Taxes, and the Impact on Holiday Shopping is Real

How much can I expect to spend on holiday shopping this year? Well, that may depend on where you live and shop. You see, your location can play a huge role in dictating the final price of an item. This is due to the fluctuation in sales tax rates across the country at both the […]