Processing Sales Tax Returns
When sales tax returns are processed manually, the resources of a company's tax or accounting department may be unnecessarily strained by such a labor-intensive task. Maintaining strict compliance with tax laws is a complex process that involves hundreds of different forms, thousands of different tax rates, and a wide array of jurisdictional rules.
Without appropriate sales tax services, non-compliance can occur and be costly, resulting in obvious and ambiguous expenditures such as:
- Compliance and regulatory research
- Over-payment due to incorrect tax rates and methods of calculation
- Additional costs incurred from missed deadlines, clerical errors, or lost tax returns.
- Maintenance of tax software for in-house returns processing.
- Errors due to manual record keeping.
- Non-compliance fines and penalties
- Inability to provide sufficient audit trail.
While the areas mentioned above can be costly, with the right sales tax services the above instances can be minimized or avoided altogether.
Tax and accounting departments can find a quick and less expensive solution to multi-state sales tax return compliance by utilizing automated sales tax services that provides the following:
- Accurate and up-to-date tax rates and regulatory information.
- Creation of electronic sales tax return data files for use with jurisdictional files.
- Generation of both paper and electronic payment requests.
- Creation of useful reports that include valuable tax management information.
- Clearly defined and detailed audit trail.
- Filing archiving and retrieval.
In addition, return processing software should have the ability to format and print all required filing forms including sales tax returns, consumer use tax returns, electronic return data files, schedules, and jurisdictional payment requests.
Free Up Tax Department Resources
The benefits of using automated sales tax software for return processing also include the ability for any member of a tax department to use that tax software without dependence on IT resources. By freeing up tax department staff from having to deal with the manual burden of preparing and processing sales tax returns, they can instead focus efforts on alternative areas thereby increasing productivity.
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