Sales tax is broadly defined to mean any tax that is charged to the end-user customer by the retailer of property or services. Though this definition is correct, it does not always provide a complete picture of a business’s transactions tax liabilities.
Sales taxes are a transactions based tax, but they are not the only transactions based taxes.
There are numerous specialty transactions taxes applied to specific products, services and industries. For example, there are specialty transactions taxes for gas, lodging, food, beverage, telecommunications and other products/services. I mention these additional transactions taxes because many of the software and service solutions for sales tax do not handle the compliance responsibilities for the specialty transactions taxes.
When CPA firms need to help their clients find software and service solutions for sales tax compliance, it is critical that the firm identify all the transactions tax responsibilities – not just general sales tax – so a comprehensive transactions tax solution is offered to their clients.
It is very rare that a software and service solution actually solves 100% of a problem seamlessly. Generally, the 80/20 rule applies and the software and service solution solves 80% of the problem with the remaining 20% of the problem requiring customization or process changes. The client understand and expects this as long as the “80%” covers the majority of their risk and cost. Make sure the solution you propose to your client can solve 80% of their problem. If 80% of their problem is specialty transactions taxes rather than general sales taxes, you need to be sure to lead them to the proper solution. TaxConnex is a comprehensive transactions tax compliance solution that will make sure all sales and transactions taxes are handled seamlessly.