Sovos “2020 State of Sales and Use Tax Report” Shows Governments Outpacing Businesses in Implementing Technology, Driving Change

June 24, 2020

Global tax software provider Sovos today issued its annual “State of Sales and Use Tax” report focusing on the trends, impediments and technology facing organizations as they try to solve sales tax issues in a post-Wayfair economy. The report focuses on the here-and-now of sales tax compliance, examining trends in nexus laws and regulations, and how economic circumstances brought on by the COVID-19 pandemic affect state efforts to collect taxes and preserve revenue streams.

Governments at every level have expanded technology investments to digitize the sales tax collection process and close tax gaps. Since the Wayfair decision, which vastly expanded the nexus footprint of organizations, states have moved quickly to establish new regulations to maximize income. Sovos’ report details how rapidly the sales tax landscape is evolving:

  • Number of tax jurisdictions has eclipsed 12,000
  • More than 7,000 different tax forms currently in use
  • 637 form revisions in 2020 alone
  • There have been 571 rate changes in the past 12 months

“Businesses are struggling to keep up with the number of changes being mandated and the pace at which they are being implemented,” said Charles Maniace, vice president, regulatory analysis and design, Sovos. “Gone are the days when businesses could manage sales tax on their own schedule. States are becoming far more proactive in their oversight, and they’re using notices and audits to collect what they are due.”        

The digitization of sales tax is forcing organizations to reexamine how they manage and execute sales tax strategies to ensure compliance. While manual processes and custom solutions may have been suitable in past environments, increased levels of speed, oversight and complexity now demand more sophisticated methods. The report shows why tax compliance is increasingly an IT challenge and how these two teams collaborating earlier and more frequently should be an integral part of your compliance strategy.

“The digitization of tax has completely changed the game for organizations trying to achieve and maintain compliance. The sheer number of form updates and rule changes now applicable to an organization and taking place on a near daily basis make it all but impossible for businesses to track and implement on their own. The importance of an approach which combines tax and technology to guard against organizational risk cannot be overstated,” said Pawel Smolarkiewicz, chief product officer, Sovos.

For more information:

About Sovos
Sovos is a leading global provider of software that safeguards businesses from the burden and risk of modern transactional taxes. As VAT and sales and use tax go digital, businesses face increased risks, costs and complexity. The Sovos Intelligent Compliance Cloud is the first complete solution for modern tax, giving businesses a global solution for tax determination, continuous transaction controls, and tax reporting. Sovos supports more than 7,000 customers, including half of the Fortune 500, and integrates with a wide variety of business applications. The company has employees throughout North America, Latin America and Europe. Sovos is owned by London-based Hg. For more information visit http://www.sovos.com and follow us on LinkedIn and Twitter.

Sign up for Email Updates

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

Additional Press Releases

July 7, 2020
Sovos Acquires U.K.-Based VAT Managed Services Company Accordance

Global tax software provider Sovos today announced it has acquired Accordance, a U.K.-based value-added tax (VAT) managed services company. Accordance has been a Sovos partner since 2018 and has implemented Sovos VAT Reporting software to provide technology-enabled compliance services to its clients. The acquisition comes at a critical moment for VAT countries, where businesses face a range […]

Read More
ShipCompliant
June 15, 2020
Brewing Industry Sees 43% Drop in Product Registrations

Brewers are bringing fewer new products to market amid coronavirus concerns and a slowing economy, according to Sovos ShipCompliant label registration data for the months of April and May 2020, indicating these producers are doubling down on their existing product lines. Overall, producers and wholesalers in the beer, wine and spirits business registered 16,164 products through Sovos […]

Read More
June 9, 2020
BlockFi Selects Sovos for Tax Information Reporting on Cryptocurrency Investments

Global tax software leader Sovos today announced that BlockFi, a financial services company focused on building products for cryptocurrencies, selected Sovos for its 1099 crypto tax information reporting needs. The Sovos Tax Information Reporting solution automated BlockFi’s 1099 forms and filings for crypto investor clients for the 2019 tax year while reducing potential errors and delivering automatic regulatory […]

Read More
June 3, 2020
Sovos GTD – Tax Determination for US Sales and Use Tax .0.0.1 achieves SAP Certification through the “Co-Innovated with SAP

Global tax software leader Sovos announced today that its Global Tax Determination .0.0.1 solution has achieved SAP certification as integrated with SAP S/4HANA® Cloud, as part of the “Co-Innovated with SAP” program. Sovos Global Tax Determination helps customers determine automated, accurate rates for every transaction and in every jurisdiction. By combining value-added tax, goods and services tax, […]

Read More
Sales & Use Tax
May 21, 2020
Sovos Earns SIIA CODiE Award for Best Compliance Solution

Global tax software provider Sovos today announced that its Sales & Use Tax Filing product has been named the Best Compliance Solution of 2020 as part of the annual SIIA CODiE Awards. The CODiE Awards recognize companies producing the most innovative business technology products across the U.S. and around the world. Sales & Use Tax Filing mitigates […]

Read More