Hard to believe if you’ve ever dealt with sales tax jurisdictions, but they will actually give you a break on paying your sales tax in the form of vendor discounts and compensations.

Sales tax is a major obligation for your business. As with most such obligations, you probably ask, “Can automation help me?”

The short answer: Maybe not.

Let’s look at a few factors that could make relying solely on an eCommerce tax platform for compliance risky for your company.

Online selling of products and services triggers sales tax obligations today like never before – and has ever since the Supreme Court’s 2018 Wayfair decision unleashed economic nexus on e-commerce merchants nationwide.

Sales tax automation has come a long way since the Quill vs. North Dakota case in 1992. Now, even the smallest multi-state businesses and startups have access to sales tax automation options that lower costs and ease the burden of compliance. AI is even making it’s way into the sales tax world, but how much do you trust an automated bot or machine with your sales tax obligations?

Sales tax is meant to be a pass-through tax and thus one that should have minimal impact on a company’s bottom line. The sales tax is collected by businesses and “passed-through” to the taxing jurisdictions. Of course, there is cost associated with managing this compliance obligation; however, the costs of not managing the compliance process are significantly greater. If you fail to collect and remit the applicable sales tax when you have an obligation, under audit a jurisdiction will assess the tax due + a penalty + interest. This then becomes a bottom line hit unless you can recoup from your customers.

Staying on top of your sales tax obligations is crucial to maintaining compliance and avoiding costly penalties. However, navigating the complex world of sales tax filing is a lot for a business to manage without the right expertise.

Since the Wayfair decision five years ago, sales tax compliance has had to become a major priority for businesses with multistate sales.  In fact, 33% of finance professionals rank their top two concerns of managing sales tax as keeping up with their evolving nexus footprint, according to a TaxConnex blind survey conducted at the end of 2022. The survey also stated that over 52% of financial leaders remain relatively unhappy with their company’s approach to managing sales tax.

Sales tax compliance involves a highly complex set of rules and regulations. These rules change frequently in many jurisdictions, and the question of whether (and how) your company needs to collect and remit sales tax to a certain jurisdiction can be quite difficult to determine.

Understanding the various aspects of your sales tax process is critical to keep your business on solid ground as it relates to sales tax and minimize your risk.

Taxable sales of products direct to end users has been a staple of business for ages. One relatively new development is the complex overlay of sales tax on these transactions.

It’s one of the most important aspects of an online business – and one of the wackiest when trying to determine whether sales tax applies or not. What is it? Shipping.

For most businesses, sales tax is not a top priority. It probably doesn’t even make the top 5 list! But if not managed correctly, it can cause major headaches. Understanding the various aspects of your sales tax process is critical to minimize your risk and to keep your business on solid ground as it relates to sales tax.

You’ve determined you have nexus and your products and/or services are taxable. Now how do you implement and actually charge sales tax? There are several ways to calculate and charge sales tax but many people lean towards letting a software handle it for them, but is this really the best solution for everyone?

Technology has radically changed the way consumers buy goods and services.  And while we can easily identify how digital disrupters, like Amazon, Netflix and Facebook have changed our purchasing behavior, a lessor known change is the way they’ve impacted sales tax.  In fact, it’s spurred the largest development in sales tax in over 50 years with the Wayfair case. While the physical presence tests still apply, the Wayfair case dramatically expands the number of businesses subject to sales and use tax obligations.