Top Reasons Businesses Are Changing Their Sales Tax Processes in 2025

Businesses today face a combination of internal growth and external pressure from shifting tax laws. Based on our research, here are the top three reasons companies plan to revise their sales tax management strategy this year:

1. Increased Business Complexity

As companies expand into new markets, product lines, or services, they encounter more nuanced and region-specific tax rules. What worked before, whether manual processes or outdated systems, can’t scale with these changes.

Common challenges include:

• Navigating taxability across multiple states or jurisdictions
• Applying correct sales tax rates for diverse product types
• Tracking exemptions and thresholds in real time

Businesses need more flexible, scalable solutions to stay compliant and reduce risk.

2. A Need for More Guidance and Expertise

Sales tax is complicated, and not every business has in-house tax professionals. Without the right knowledge, companies may apply incorrect rates, miss exemption opportunities, or file late, exposing themselves to penalties.

That’s why more organizations are turning to:

• Outsourced sales tax services
• Automated compliance platforms
• Educational resources for taxability, nexus, and filing requirements

There’s a growing demand for both technology and human expertise to make sales tax less overwhelming.

3. A Time-Consuming Process

Even businesses using some automation find that sales tax compliance remains time-consuming. Updating tax rates, managing returns in multiple states, and correcting errors drains time and resources.

Key frustrations include:

• Manual data entry and reporting
• Tracking tax rate changes across jurisdictions
• Managing monthly, quarterly, or annual filing deadlines

In 2025, companies are actively searching for tools that simplify processes, reduce touchpoints, and save time.

What Are Businesses Prioritizing Instead?

Survey respondents identified data as a central theme in shaping smarter, more strategic sales tax management.

Here are the top three priorities businesses are focusing on in 2025:

1. Assessing the Impact of Business Decisions

Companies want to understand how decisions, like launching in a new state or changing product pricing affect sales tax obligations. Strategic tax planning helps leaders avoid surprises and supports smarter expansion.

2. Enhancing Data Protection

With increasing scrutiny on data privacy, businesses are making data security a top priority. Protecting sensitive financial and customer information isn’t just good practice; it’s also essential for regulatory compliance.

3. Improving Data Visibility and Reporting

Organizations want real-time tax reporting tools that provide clear insights into liabilities and trends. Better visibility means fewer errors, faster audits, and stronger financial planning.

The Bottom Line

Sales tax management is no longer a back-office task—it’s a strategic necessity. In 2025, more businesses are:

• Scaling into new regions and product categories
• Demanding expert guidance and up-to-date knowledge
• Prioritizing data-driven decision-making and protection

Are you ready for what’s ahead?

Now’s the time to assess your current sales tax process. Whether you're struggling with complexity, lack of visibility, or limited internal resources, TaxConnex can help you streamline your operations and ensure compliance.

Want the full story? Download our eBook for a deeper look at survey results, expert analysis, and actionable strategies for navigating sales tax in 2025.