According to a recent Accounting Today article, "technology is crucial in the struggle between states and taxpayers." So what is the key to how the economy relates to sales tax and technology?
According to John Minassian, vice president of tax content development at Vertex Inc., "The key is to offer integrated enterprise technology that enables compliance for all taxes that businesses need to file. This may include income taxes, payroll taxes, and value-added taxes, as well as sales and use taxes. Ultimately, the solution should also feature tools to help professionals analyze tax data for audit and planning purposes.”
The states have tried to match revenues with expenditures, but some federal initiative have made this a strenuous process. According to the article, there are four state strategies that the states can engage in.
1. Redefinition of nexus
2. Collection of taxes owed
3. Support for a national solution
4. Increasing use of technology
Minassian concluded “Obviously, the cloud deployment model is being considered in businesses of every size. There is a tendency among companies to shift from making a large up-front payment for a software license to paying for tax calculation as a service, similar to a utility.”
Vertex Cloud, a cloud-based solution of Vertex Inc., enables calculations and returns in a single, cloud-based solution, offering flexible service levels and featuring attractive pay-as-you-go pricing with no upfront fees for small to medium-sized businesses.