Are you doing business in multiple states? If so, you may be aware of how complex sales tax regulations can be. Or worse, you may not be aware - thereby putting yourself at risk for a costly audit.
There are many factors that come into play when determining the sales tax rate (if any) for a given transaction. These include:
1. Nexus – Do you have enough of a presence in a state to warrant collecting and remitting sales tax? Something as small as having a remote employee based in a state can create nexus. Laws vary from state to state.
2. Rules – Are your specific products/services taxable in your nexus states? Are your goods being purchased for direct use or for resale?
3. Rates – What is the current tax rate on a given sale based on all local taxing jurisdictions and recent updates?
4. Jurisdiction – Which jurisdiction is entitled to taxes on a given sale?
5. Taxability – Given the jurisdiction, what is taxable and at what rate?
6. Sourcing – Do a particular state consider the destination or the origination as the basis for determining in-state taxability? Or a combination?
Now take these considerations and multiply by 11,000+ distinct tax jurisdictions in North America with thousands of rate, rule, and jurisdiction changes annually.
With all these variables to keep in mind, manual calculation of sales tax rates is time consuming, error prone, and expensive. Undercharging is costly. Overcharging will lead to unhappy customers. And then there’s the risk of audit penalties and interest.
But through our partnership with the tax experts at Avalara, LBMC Technologies can help. Through seamless integration to Microsoft Dynamics, Avalara provides cloud-based, real-time sales tax calculations based on a sophisticated, dynamic tax decision engine. AvaTax Calc dynamically delivers 100,000+ taxability rules and applies them across 11,000+ jurisdictions, ensuring that you apply the most current and accurate rates to all your transactions.
Contact LBMC Technologies to schedule your free 20 minute sales tax compliance checkup or watch a five minute video to learn more about why now is the time to automate.
Sales Tax Automation – The Time Is Now is a post from: Tech Talk from LBMC Technologies
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