Even those well-versed in their industry, many businesses overlook the critical aspect of sales tax compliance. Failing to recognize these obligations can expose your company to audits resulting in significant fees and penalties. Tax compliance for sales in the USA is complex. Below are the Sales and Use taxing jurisdictions in just one state (Ohio).
Without a comprehensive tax strategy such as Avatax, a company has to manually ensure a sale to Williams, OH is taxed differently from a Sale to Colombus, OH. Changes in these jurisdictions happen frequently and expose companies to costly, manual errors that can occur.
Multiply tax jurisdictions in Ohio (a relatively smaller US State) to the other tax jurisdictions in the other 49 States, and we can quickly see how onerous it can be.
It's time to dive deep into the crucial components that untangle the complexities of the U.S. sales tax environment. Let's gain a comprehensive understanding of each of these elements and take control of your financial success.
Understanding Your Compliance Risk
Determining whether your business is at risk requires a proactive approach. It involves a comprehensive assessment through an in-depth review of your operations, sales channels, and the jurisdictions in which you operate. By conducting this thorough examination, businesses can identify compliance gaps and take corrective measures before they escalate into serious issues. Recognizing the importance of understanding compliance risk sets the foundation for a safer sales tax strategy.
Impact of Recent Sales Tax Legislation
Recent changes in sales tax legislation have significantly impacted businesses, even those previously considered exempt. The expansion of economic nexus laws, marketplace facilitator rules, and changes in tax rates have introduced new challenges for businesses operating across state lines. Staying informed about these legislative updates is crucial.
Navigating New Responsibilities
Automated tax compliance software is the solution. Avalara AvaTax is an innovative, cloud-based tax calculation software that applies regularly updated rates based on geolocation, item taxability, new legislation, tax regulations, and more.
Avalara’s team of tax experts and software engineers is dedicated to making tax compliance faster, easier, and more affordable. Businesses will manage U.S. sales tax compliance with confidence and assurance. Compliance not only protects your business but also fosters a reputation for integrity and reliability within your supply chain.
