No company wants a focus on managing sales tax to distract them from their primary business objectives. But it’s a mandatory part of business that can be particularly daunting for SMBs that lack the necessary time and resources to keep pace with the complexities of sales tax. With over 12,000 U.S. tax jurisdictions that are constantly changing, remaining compliant has never been more challenging.
To gauge just how much pressure those who have responsibility for sales tax management/administration at their organization, Sovos surveyed 250 individuals for their 2022 Sales and Use Tax Pressure Index. This survey takes a deep dive into just how stressful sales and use tax management has gotten and the impact it can have on an employee’s desire to stay in their jobs. 83% of respondents stated that automating their organization’s tax management process would make them happier in their current role, and they would be more likely to stay with the company.
SMBs often have employees who need to account for sales and use tax in addition to other job requirements. For example, more than one-third (35%) of respondents said that the growing complexity of sales tax distracts from core business priorities. Over 50% report seeing a strain on IT and other resources, while 13% said it leads to a stressful workplace and employee churn.
How stressful has sales and use tax management gotten?
Respondents of the survey stated they would rather be doing a multiple of chores rather than dealing with the headache that is sales tax compliance.
· 63% would rather go grocery shopping
· 51% would rather do laundry
· 39% would rather go to the dentist
· 33% would rather sit in traffic
While staying in compliance is an ongoing battle for businesses of all sizes, it is especially challenging for SMBs who lack the internal expertise to manage the ever-changing world of tax. Costly audits and fines can be detrimental to SMBs who do not have the same budget as their bigger competitors. Additionally, the intricacies of sales and use tax management can quickly multiply for SMBs looking to expand their product offerings or enter new markets.
The ability to update changing sales and use tax rules in real or near real-time is also a problem for many organizations. Less than one-third of businesses can update sales tax in a matter of hours, according to the survey. That can be a long time for sales tax transactions, especially with ever-evolving updates, such as changing sales tax holidays. Additionally, two-thirds of the respondents said that their level of anxiety as it pertains to sales tax was high or moderately high.
The results show that managing sales and use tax is best left to the professionals. Getting your sales and use tax management under control doesn’t need to be difficult. Working with the right partner can ease tax-related strain while also ensuring complete compliance. Automating your processes migrates risk and takes the burden away from your team. This allows you to focus on your core business priorities instead of wasting your time and energy attempting to be a sales tax expert.
Download our Sales and Use Tax Pressure Index to find out how your company compares.