Sales Tax Calculation Services
For businesses to achieve sales tax compliance and maintain consistently accurate transactions day in and day out, it's important to eliminate areas that might compromise calculation accuracy. Sales tax calculation errors can cause yearly increases in outstanding receivables. Without appropriate, up-to-date state and local sales tax rates, companies may face reduced cash flow and excessive audit risk. Incorrect sales tax calculation can also cause a company to inadvertently set aside larger audit reserves than necessary. The aforementioned instances are just a handful of examples where inefficient sales tax calculation can cause issues with how a company's tax department handles transactions.
Automated Sales Tax Services
To ensure accurate and efficient sales tax calculation, many of today's modern tax departments use automated sales tax services that integrate directly into their ERP employing the latest technologies and tax research. To do so, effective automated sales tax services must consider:
- Situs Determination - Use transaction party locations to determine appropriate situs by jurisdiction rules.
- Maximum Tax - Does a specific jurisdiction define tax limits by a maximum base or does it use a maximum tax amount?
- Tiered Tax - Application of commonly tiered tax rates among jurisdiction.
- Rounding - Applies rounding rules imposed by each jurisdiction.
- Jurisdiction Overrides - Does a particular jurisdiction's standard rate override another's?
- Tax Holidays - Recognize and apply exemptions on items that qualify during tax holidays.
Along with the above features, automated sales tax solutions should also address the other complex issues required to maximize a company's compliance on all transactions, such as:
- Jurisdiction Identification - Automatic determination of state, county and city jurisdictions as well as taxing districts.
- Day-to-Day Operation - Efficiently handle daily sales tax services through rate research, logged transaction reports and more.
- Updated Tax Rates - Maintain up-to-date system data with continual updates to sales tax rates and rules.
- Easy System Configuration - Customize automated sales tax services in line with a company's overall tax solutions.
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