Reducing Audit Risk through Sales Tax Automation
If an auditor were to walk through your door tomorrow, how confident are you that you would be found to be 100% compliant in your sales and use tax transactions?
Today most states are operating at a deficit. But no one wants to make the unpopular decision to raise taxes. So they’re finding new strategies to make sure they’re collecting every penny they’re due. Here are a few of the ways states are maximizing their sales and use tax revenue:
- Hiring new auditors – in some states by the dozens
- Expanding “nexus” or the definition of who is required to collect and remit taxes on purchases made within the state’s borders (think Amazon)
- Changing taxability rules on products and services
The result is that small and medium-sized organizations are more likely than ever to face a sales tax audit. With over 11,000 tax jurisdictions in the U.S. and thousands of rate, rule, and boundary changes every year, keeping up with it all can be a full time job. And chances are you still won’t get it right.
Automating your sales and use tax processes, including exemption certificate management if you have exempt sales, can not only save you time, but it can greatly improve your outcome in the case of any audit. Using cloud-based rate calculations based on up-to-date tax rules and regulations and rooftop level accurate jurisdiction assignment means you have everything you need to feel confident when the tax man comes knocking at your door.
To learn more about why smart companies automate, watch a four minute video: “Sales Tax Automation: The Time Is Now” or contact KTL Solutions.
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