New data from Sovos shows SMBs are feeling the pressure of modern tax reporting requirements
BOSTON – January 25, 2022 – Global tax software provider Sovos today released the Sales and Use Tax Pressure Index, which is the industry’s first report to measure the impact of post-Wayfair tax reporting requirements on small to medium-sized businesses and their employees. The research reveals that most SMBs do not have the proper technology resources required to manage today’s complex tax compliance mandates, and as a result, are facing an increase in employee stress levels and churn.
Sovos surveyed 250 individuals who have responsibility for sales and use tax (SUT) management at their organizations. These professionals have become increasingly challenged with SUT reporting over the past three years, following South Dakota v. Wayfair. The landmark ruling’s economic nexus requirements are now in nearly every U.S. state, and have become a challenge for small businesses that have tighter administrative resources than larger corporations.
“The findings in our Pressure Index reflect a level of concern and frustration about how SUT reporting is being navigated, with some even wondering if it may be time to seek other employment,” said Tim Roden, solution principal, sales and use tax at Sovos. “For example, 83% of respondents said automating their organization’s tax management process would make them happier and more likely to stay in their current role.”
Nearly two-thirds of respondents said their current approach to sales tax management requires some level of IT assistance – yet, data shows less than half of small businesses can afford internal IT staff. For those organizations that do employ IT professionals, more than 50% say today’s tax reporting obligations are increasing and distracting them from their primary objectives.
Take, for example, Skip Graham, network administrator at GoKeyless, who implemented Sovos Global Tax Determination with Netsuite to automate the company’s SUT compliance after struggling with reporting complexity. “We attempted the manual approach, and it was an epic failure for us. While everyone’s situations are different, the sheer volume of changing regulations makes it nearly impossible to manage on your own.”
“Many respondents said they have recently implemented technology to ease tax reporting, yet they remain frustrated by the process,” Roden continued. “This could speak to a lack of training and support from their vendor when implementing new technology. The right sales tax partner will help to ease your daily burden of managing SUT complexity and allow you to focus on your primary business objectives.”
To download a copy of Sovos’ Sales & Use Tax Pressure Index, visit www.sovos.com.
Sovos was built to solve the complexities of the digital transformation of tax, with complete, connected offerings for tax determination, continuous transaction controls, tax reporting and more. Sovos customers include half the Fortune 500, as well as businesses of every size operating in more than 70 countries. The company’s SaaS products and proprietary Sovos S1 Platform integrate with a wide variety of business applications and government compliance processes. Sovos has employees throughout the Americas and Europe, and is owned by Hg and TA Associates. For more information visit http://www.sovos.com and follow us on LinkedIn and Twitter.