It seems that sales tax compliance has never been more complicated. To help your small business achieve greater success and security, we offer you 12 sales tax tips. Each tip was selected by an Avalara sales tax (sales tax for SYSPRO ERP) expert, and is designed to help you stay on top of the ever-shifting sales tax landscape.
- Nexus - Determine if you created nexus in any new jurisdiction over the year. If you have indeed established nexus, check the state’s sales tax laws so that you can accurately calculate, file, and remit your sales tax liability.
- Mandatory Filing - Check if you will be required to pay your returns electronically. Knowing the payment options and requirements in your states will ensure that you know the correct way to pay.
- Pre-Payment - Find out whether you will be required to make pre-payments in any jurisdiction. If you find you are required to make prepayments, and you remit sales tax in multiple jurisdictions, you may end up with multiple filing schedules to manage.
- Sales Tax Payable - Reconcile your sales tax payable account. Make time to reconcile your sales tax payable account with your source documents.
- Check Checks - Verify that all checks you have issued to the DOR have cleared the bank. Do you know what lurks in your stack of papers or filing cabinet?
- Filing Frequencies - Update the filing frequencies on your tax calendars. Jurisdictions typically send notices to taxpayers several months in advance of their filing frequency changing, however if you don’t receive a notice, that does not mean the new filing frequency doesn’t apply.
- Product Taxability - Make sure you understand the taxability of new product offerings. Product taxability laws are not consistent across state lines—what may be taxable in one state, may be exempt in another.
- Exemptions - Check that customers’ tax exempt status is updated and agrees with the term of their exemption certificate on file. If you have changed your company name or acquired a new company, you may need new exemption certificates from all your customers.
- Take Care of Any Notices - Take care of any notices. Failing to respond to notices in a timely manner may result in a levy to your bank account, a lien on your corporate officers, or suspension of your business license so you can’t do business until it is resolved.
- Zip Codes and Jurisdictions - Verify your jurisdictions using exact location, not ZIP code. Identifying, accurately, taxing jurisdictions pinpointing the correct destination or location of the transaction by using data such as latitude and longitude coordinates.
- Documentation and Audits - Ensure that your process for keeping sales records will help (not hurt) you in the case of an audit. Ensure your process have ongoing support for the above points.
- Sales Tax Automation - Consider Sales Tax Automation. More and more businesses are turning to sales tax automation to help them accomplish these goals.
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