Tax Complexity and Drivers for Transforming Finance

Why tax complexity is accelerating

Businesses are navigating more change than ever. Customer behavior has shifted toward digital channels, supply chains have been rerouted, and governments worldwide have responded with rapid updates to tax regulations. The result: finance teams are under pressure to keep up, and many of their existing tools are not built for the pace of change.

Sales and use tax is more complicated than it looks

U.S. businesses often underestimate the complexity of sales tax. The South Dakota v. Wayfair Supreme Court decision reversed nearly 30 years of precedent, giving states the right to collect sales tax on transactions within their jurisdictions. That ruling, combined with growing e-commerce and thousands of local tax jurisdictions (some drawn at the level of individual streets), makes accurate tax determination a real challenge. Most ERP solutions offer only basic support, leaving teams to manually update rates and jurisdiction data. As volume grows, so does the risk of errors, penalties, and audits.

Globalization raises the stakes for VAT

Outside the U.S., value-added tax (VAT) adds another layer of complexity. VAT compliance depends heavily on manual processes and thorough record-keeping for every transaction. Errors in VAT records can trigger audits, civil fines, or worse. Recent regulatory updates that took effect in July 2021 expanded VAT requirements significantly, pulling more businesses and digital transactions into scope. For teams relying on basic ERP functionality, managing VAT determination and remittance manually is a growing compliance risk.

Digital transformation is the right moment to address tax

Many companies are already migrating from on-premise systems to the cloud to improve efficiency and scalability. That transition is a natural opportunity to upgrade tax capabilities at the same time. Treating tax as a separate project is no longer necessary. Adding an integrated tax engine extends the value of your other systems and creates a consistent, accurate process for indirect tax, no matter where or how your business operates.

How Vertex helps

Vertex offers a full suite of integrated indirect tax solutions for Microsoft Dynamics 365. A single tax engine that works both on-premise and in the cloud connects you to the tools you need and creates one reliable source of truth for tax data. With more than 40 years of experience supporting indirect tax for global businesses, Vertex can help your finance team streamline compliance, reduce audit risk, and stay ready for whatever changes come next.