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Ignoring the Hype

Ignoring the Hype

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Published by avalara
Sales and use tax management doesn't have to be an administrative burden. Find the right sales and use tax solution for your business. Learn how by reading this white paper authored by industry expert "Even a Nerd Can Be Heard" Geni Whitehouse.
Sales and use tax management doesn't have to be an administrative burden. Find the right sales and use tax solution for your business. Learn how by reading this white paper authored by industry expert "Even a Nerd Can Be Heard" Geni Whitehouse.

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Categories:Types, Business/Law
Published by: avalara on Jan 06, 2012
Copyright:Attribution Non-commercial

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10/01/2013

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Page 1 of 11.
Ignoring the Hype
© Avalara 2013
Sponsored by Avalara, Inc.
Copyright © 2013
 
Page 2 of 11.
Ignoring the Hype
© Avalara 2013
In 1917, the frst large electric displaybillboard was installed. Eleven years later,the frst running electric sign was lit orthe frst time in order to announce HerbertHoover’s victory in the Presidentialelections.
TIMESSQUAREFACT
The market or sales and use tax solutions is harder to navigatethan Times Square on New Year’s Eve. With all o the lashinglights, glitzy billboards, and noisy street vendors, it’s almostimpossible to separate act rom fction. On one side o thestreet you fnd shop ater shop o desktop solution providers,and on the other, you fnd cloud application vendors. And itdoesn’t stop there. On the next corner, you have to choosebetween single purpose tax providers and large conglomeratespromising solutions or every imaginable business problem.Should you stick with established brands or boutique shops?And what about doing it yoursel? Is that still a viable option?It’s enough to make you dizzy.Finding the right sales tax solution doesn’t have to make yourhead spin. In this guided tour, we’ll help you eliminate the hypeand separate act rom fction so you can tell the dierencebetween a real solution and a cheap knocko. With properinormation, you can be sure you won’t drop the ball on thisimportant area o tax.
 
Page 3 of 11.
Ignoring the Hype
© Avalara 2013
Over 30 million people visitTimes Square annually.
Hype:
Sales tax is no big deal.
It is true that sales tax rates are generally lower than income taxrates. Amounts charged on individual sales transactions are notby themselves signifcant; however, across all sales, the dollars canquickly add up. When you consider the additional cost o penalties,interest and audit adjustments, there is an even greater cost orbusinesses that ail to properly collect, report, or remit sales tax.At a time when states are seeking to increase their revenues tocover budget shortalls and businesses are seeking to hold onto their profts, wise business leaders can no longer aord toignore sales tax management. States are beefng up their salesand use tax enorcement eorts when businesses can least aordan unexpected, and potentially negative, audit adjustment.
Fact:
Sales taxes are complicated.
In order to properly assess, collect, and remit sales taxes, businessesneed help answering the ollowing questions or each state in whichthey sell:1. Nexus – What activities are you perorming in a given stateand are they sufcient to establish a taxable connection?2. Rules – Are the items or services you sell taxable in a givenstate? Is the buyer subject to sales tax? Are goods being pur-chased or resale?3. Rate – What rate o tax applies to a taxable sale? Have youconsidered all local taxing jurisdictions and recent updates?4. Jurisdiction – Which jurisdiction has the right to tax aparticular sale?5. Taxability – Which items are taxable in a given jurisdictionand at what rate?6. Sourcing – Does a given state use a destination ororigination basis or determining taxability in-state?Or does it use a combination o the two? Are you trackingwell enough to ensure sales taxes are remitted to the right jurisdiction?
TIMESSQUAREFACT

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