The Sales and Use Tax Pressure Index

How does your company compare?

Complying with ever-evolving sales and use tax regulations is not an optional business consideration. Small and medium-sized businesses can be hit especially hard with complicated, complex and distracting requirements. SMBs face a tremendous amount of pressure as they often don’t have the layers of resources that larger companies have at their disposal. 

Economic nexus is now in play in nearly every U.S. state, and SMBs cannot afford to assume that increased sales and use tax scrutiny doesn’t apply to them. With regulators looking to close the tax gap, there are now increased chances of notices, audits, penalties and fines. 

To gauge just how much pressure those who have responsibility for sales tax management/administration at their organization, Sovos surveyed 250 individuals meeting this description to learn about their concerns and frustrations. Nearly eight out of 10 respondents said that they work at companies earning less than $10 million or between $10 million and $25 million in annual revenue.

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The survey revealed the following key takeaways: 

  • New technology can help ease the burden – Eighty-three percent of respondents said 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.
  • IT is feeling the pressure – Over 50% reported seeing a strain on IT and other resources, with 35% saying that the growing complexity of sales tax distracts from core business priorities.
  • Fearing the financial consequences – Nearly 80% said either generating an audit or facing a financial penalty was their biggest fear if a mistake was made when remitting sales tax.
  • Anything but sales tax compliance – There were numerous other chores respondents said they would rather be doing than attending to sales tax compliance requirements. Going grocery shopping (63%), doing the laundry (51%) and even going to the dentist (39%) were all cited as better alternatives than attending to sales and use tax compliance processes. 

Is this a pressure point for your organization? Are you finding core business objectives being pushed to the side, while employees buckle under the added responsibilities? There should never have to be a choice between losing a sale or processing a sale when you know that the sales tax is wrong.

It doesn’t have to be difficult to get your sales and use tax management under control. The right partner can help ensure that the burden of regulatory compliance shifts from your organization to theirs, providing peace of mind so you can focus on core business priorities.