I am going to start my blog today by confessing that I am unusual – maybe even weird. I like sales tax and the related tax compliance.
I like it because it fits a compulsion I have to clean up messes and make things fit into their proper boxes. Nationwide sales tax laws provide unlimited opportunities for businesses to mess up, so it makes sense I would enjoy it so much.
If you know anything about sales tax laws, they create a lot of disparate rules and requirements that often time don’t make sense.
There are 50 state governments and thousands of localities that impose at least one type of transaction tax (i.e., sales tax, use tax, gross receipts tax, license tax, utility tax, etc.).
For each of these tax types and jurisdictions, there are rules dictating their applicability and there are rules dictating how the taxes are reported and paid.
As an added bonus, these laws, rules and requirements change on a daily basis in at least one of the jurisdictions.
Finally, when you consider the fact that these rules are also imposed and enforced by inefficient bureaucracies, you have a formula for a mess.
Most people in the sales tax compliance world believe that the disparate rules and requirements I describe above can be managed by technology. I think they are partially right. There is definitely a portion of the rules and requirements that must be managed by technology; however, there is also a portion that requires knowledge of the nuances and understanding of how to accommodate them outside of technology.
This means to be successful in sales tax compliance the process requires good policy and procedures and experienced and knowledgeable people to supplement the technology.
There has to be a perceived value in the non-technology piece of the process to avoid the mess.
Now I have confirmed why I am weird! I want to create the ‘perfect’ sales tax compliance process that includes the right mix of technology, process, policy, procedures and talented resources.