State & Local Tax Blog

How Technology Has Changed the Sales Tax World

Peisner Johnson was formed 30 years ago; back when the internet had yet to come into existence. And here, we’ve seen a shift from manually navigating information on sales tax and state laws using binders and leaflets to having a wealth of information at the tips of our fingers, all online. 

While we recognize the Internet’s usefulness and have seen how new technology development has been phenomenal in the sales tax world, we have also found it does not always provide the simple solutions to complex processes that everyone is looking for. Let’s look more into why.

Automation

Let’s start out by talking about automation. The role of automation is a supportive role in ongoing sales tax compliance. It is a key part of the equation, and without it we would revert back to the ‘dark ages’ when we were flipping through leaflets and sorting through binders. In fact, there are many great benefits to sales tax automation. 

Automation can:

  • Provide accurate sales tax rates
  • Designate the proper taxability of transactions
  • Track and manage exempt sales
  • Increase efficiencies 
  • Free up internal resources

There’s no question as to whether the revolution of sales tax automation is a valuable tool, indeed we find ourselves leaning on it now more than ever. It seems like a simple solution to a complicated problem, right? 

Unfortunately, it’s not the end-all-be-all solution. And here’s why.

Sales tax compliance is complex and multi-layered

Most software options seem to automate the full sales tax process, but what most businesses don’t realize is that they still have responsibilities, which include but are not limited to:

  • Managing an expanding nexus footprint 
    • Technology might be able to help you figure out the economic nexus based on general guidelines but it can’t grasp the nuances and unique needs of different businesses.
  • Respond to jurisdictional notices and inquiries
    • States will often post notices to a company or business’ online file account and the automated solution cannot respond to them. A person must see the notice and take specific action to help resolve it. 
  • Update and manage the tax calendar and change filing frequencies
    • Keeping up with filing needs requires a person to oversee software.
  • Register to collect and remit sales tax, and then remit sales tax amounts to the tax authority
  • Know who you are, where you are, and how you must comply 
  • Keep track of the taxability of new products and services you add

Simply put, when it comes to sales tax automation there is no such thing as “set it and forget it.”

As much as it may simplify your calculation process, it’s not a human. And that’s where we come in. 

The Value of A Sales Tax Expert 

As “the sales tax people”, we can provide you peace of mind while we help you navigate the complexities of the sales tax process.

 We can help you with the nuances that arise and accurately prepare and file all of your state sales tax returns. We can also work with you on your automated solution to make sure it’s correctly applying, collecting, and remitting that tax. There is confidence in collaboration, and we are here to collaborate. Peace of Mind is a What’s Next Call away. 

We look forward to hearing from you!

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