Sales tax compliance isn’t for wimps. Just ask accountants and tax managers. After all, compliance isn’t just number crunching and spreadsheets. Following the sales tax rules of a jurisdiction involves far more than just finding the right tax rate. From product taxability to tax-exempt transactions to sales tax holidays, compliance tasks can hamstring even the most efficient operations.
Savvy tax managers know sales tax compliance is a difficult but worthy task. Get familiar with these Six Common Sales Tax Registration and Filing Errors and gain some best practice tips for overcoming them.
1. Not knowing nexus.
Identifying where you have nexus is critical to knowing if you have a sales tax obligation.
2. Failure to register.
Knowing where, when, and how to register to pay tax is crucial.
3. Wrong forms and formats.
Many states are starting to require electronic filing and payment of sales tax. Knowing which states have what requirements is challenging.
4. Late filing.
Identify changes to state filing schedules or prepayment requirements in order to avoid fines and late fees.
5. Remittance errors.
Reconciling transaction records with sales tax payable accounts.
Avalara (Sage Sales Tax module) can automate your sales tax process to avoid filing issues along with penalties and fines.
Click here for detailed information on each of these issues and how Avalara can help.