Managing sales tax should never be an impediment to core business objectives. Whatever industry in which your business operates, you aim to provide products and/or services to your customer base – managing sales tax is not your core objective. However, sales tax cannot be an afterthought either.
Deciding on and implementing a sales tax process or solution for your organization is essential for meeting all levels of compliance requirements. No one wants to face costly notices and audits. Finding the right approach to sales tax management also requires an evaluation of your business’ internal capabilities, existing technology and varying levels of expertise.
Remember that no business is too small when it comes to sales and use tax collection and remittance. Since June 2018 with the passing of the South Dakota v. Wayfair, Inc. Supreme Court decision, the sales tax world was forever changed. Nearly every state has enacted and further refined its rules regarding the sales tax collection responsibilities of remote sellers. The number of jurisdictions and regulations are continuing to grow and become more complicated.
Local, state and federal governments alike are implementing more digital options to help increase their ability to collect revenue, reduce fraud and shrink the tax gap. Furthermore, the Wayfair decision greatly expanded organizations’ nexus footprints, and states are moving quickly to establish new regulations to maximize income owed. Notices, audits, penalties and fines will be used more aggressively as tax authorities work to expedite collections and improve transparency.
Even if you have a process in place for sales tax nexus management, it could be a good idea to ensure that it’s the best approach for meeting current compliance needs. Manual processes are not enough. The required automated assistance and expertise can often exceed the capabilities of most internal business units. Reliable cloud-based software that can automate the regulatory update process, manage labor intensive activities and stay up-to-date with the latest changes is becoming more essential each day.
Along with regulators to consider, businesses must also be aware of how a poor sales tax management process impacts customers. What if your sales tax calculation software takes too long to calculate tax at the point of transaction? Or, what if the incorrect sales tax is calculated, forcing you to charge more to the customer after the sale has occurred? Customer expectations must continuously be met, even as sales tax compliance requirements evolve in complexity.
So what is the true cost of tax management on your business? Can the right tools really give you sales tax peace of mind? We explore both of those questions and more in the following white paper.