Tackling Tax Friction Caused by Consumer, Legislative, and Corporate Changes

Three sources of tax friction

Retail tax teams are under constant pressure. Consumer habits keep shifting, tax laws keep changing, and corporate growth keeps creating new compliance demands. Any one of these forces is a challenge on its own. Together, they can slow checkout, create audit exposure, and stretch your team thin.

This eBook breaks down all three sources of friction and shares practical guidance from Frank Vasi, Tax Manager at Albertsons Inc., along with Vertex retail experts Matt Thoman and Tatyana Martinez.

When customer expectations outpace your systems

Today's shoppers move fluidly between channels. They browse in-store while checking a mobile app. They buy online and return in-store. They expect fast delivery for out-of-stock items. Each of these interactions creates a tax calculation moment. If your point-of-sale system is a legacy platform, it may not handle service fees, freight, or complex calculations the same way your eCommerce checkout does. Vasi puts it plainly: customers should get the same tax answer whether they check out online or in the store. Achieving that consistency requires investment in your POS and a tax solution that works across every channel.

Legislation moves fast, and it moves everywhere

There are more than 40,000 tax laws affecting retail across U.S. jurisdictions, and local governments rarely coordinate with each other. The same product can carry different tax treatment at two stores on the same street. When Colorado introduced its Retail Delivery Fee, Albertsons had to reprioritize an entire development project just to display the new line item at checkout. Multiply that across dozens of states and thousands of SKUs, and manual processes simply cannot keep up. A tax engine built for retail removes that burden.

Corporate growth adds complexity fast

Expansion into new regions, new product lines, or new business models creates new tax obligations. Product data quality plays a surprisingly large role here. Something as specific as juice percentage determines taxability differently in Washington versus Texas. Getting tax categories right (and keeping them maintained) is foundational work that pays off during audits. Fifty-one percent of financial decision makers still rely on ERP-native tools for tax calculation, and 41% use manual spreadsheets in at least one system. Neither approach scales.

Four best practices for reducing tax friction

The eBook outlines four practices that help retailers get ahead of these challenges: maintaining tax consistency across all sales channels, investing in clean and detailed product data, involving the tax department early in strategic decisions, and moving tax calculation close to the point of need, including edge computing solutions that keep checkout running even when connectivity is disrupted.

Looking ahead, composable architecture is accelerating how quickly retailers can adopt new technology. A flexible tax solution that integrates easily across systems means your tax team spends less time on setup and more time on strategy. So you can keep up with the pace of retail and deliver a smooth experience for every customer.