10 Hidden Costs of Sales Tax Compliance

Streamlining your sales tax compliance process doesn't just reduce your exposure to risk and save valuable time — it also instills a sense of security. Yet, making the wrong choice in selecting a partner can lead to unforeseen and escalating expenses.

This list exposes 10 subtle yet significant fees that often slip under the radar if you aren’t careful. From quotes to penalty and interest indemnification, this list is designed to equip you with the insights needed to navigate the complex landscape of sales tax compliance with confidence and clarity. By shedding light on these covert charges, we empower you to find financial transparency, proactively manage your financial obligations, and optimize your sales tax compliance strategy for long-term success.

1. Quotes

Generating quotes doesn't directly contribute to your revenue stream, yet numerous sales tax automation vendors still charge clients for each quote generated. Choose a vendor that provides sales tax on quotes without additional charges.

2. Abandoned shopping carts 

Other charges that don't directly generate revenue that vendors may slip in are billing customers for abandoned shopping carts that never result in a sale. Partner with transparent sales tax vendors about their pricing policies, ensuring you won't be billed unexpectedly for non-revenue-generating activity.

3. Sandbox

Testing new solutions shouldn't come with a price tag. Yet many vendors charge a fee for the use of their own sandbox. Seek vendors who understand the importance of robust testing environments and provide sandboxes without added fees.

4. Support

Getting quick answers to your questions from people who know what they’re talking about is critical for end-to-end sales tax compliance. Many vendors charge for their top tier support and even then, teams have delays as they try to figure out the answer. Find a vendor with real sales tax expertise that doesn’t charge you extra for it.

5. Overages

As your business grows, numerous vendors impose fees that scale with your growth, making it difficult to budget for your sales tax solution and potentially exposing you to unexpected renewals. Choose a vendor offering consistent pricing, allowing you to budget with confidence as your business grows.

6. Custom Reporting

Part of your monthly sales tax process is to reconcile your General Ledger each month.  Making the proper journal entries can be challenging in some situations.  Receiving a customized journal entry report, specific to your chart of accounts, can often streamline the reconciliation process.  Are you aware of the charges, if any, associated with custom reports like this?

7. Consulting on Sales Tax Approaches

As your business grows and evolves, so do your sales tax obligations. What if you add a new product line that has different taxability rules, open a new sales channel or are sent an audit notice?  If your provider has the expertise to answer these questions, there is a high likelihood that it will be for an additional charge. Ensure you understand charges associated with your questions, changes and support.

8. Anything But the Basic SUT Filings

Sure, your standard sales tax filings are covered under your standard service offering, but what about other less standard non-pass-through taxes that are often needed on your SUT returns?  As an example, Washington B+O tax is not presented on the invoice but is due and reported on the sales tax return.  Other providers file a simplified sales tax return and do not file the B+O return unless you ask for and then pay for it separately. Make sure you are fully compliant and not being charged extra for additional filings such as – WA B+O, OH CAT and more…

9. Notice Resolution

Managing notices and jurisdictional correspondence is a standard piece of your filing and remittance process, but most providers do not include this in their basic service offering. At least not without you alerting them of the notice first.  Many providers charge for this as additional customer support, and it is not part of your filing process.

10. Penalty and Interest Indemnification

While not necessarily an additional fee that you would see on a bill, penalties and interest related to late or missed filings or payments often flow back to you as the tax collector. Choose a provider who can indemnify their work so that you won’t receive penalties related to late or missed filings or payments, including missed filings related to changes in filing frequencies, something that may be missed if they aren’t monitoring your notices!

Looking for end-to-end sales tax compliance that isn’t going to tack on huge usage fees that penalize you as you grow and doesn’t nickel and dime you for every little thing? TaxConnex, powered by CereTax, is the complete solution you’ve been looking for. With predictable, hassle-fee, and transparent pricing, you can budget with confidence and don't have to worry about any surprise fees or jumping through hoops. It’s simple to understand pricing that just makes sense.

TaxConnex, powered by CereTax, provides the full spectrum of consulting, calculation, and compliance. With the collective knowledge of TaxConnex and CereTax, your entire process is managed by seasoned professionals, from start to finish. Get in touch to work with a company with the transparency and expertise to actually take sales tax off your plate. Click to learn more!