How Do I Know What to Pay in Sales and Use Tax?
Last Updated on November 22, 2017
If your company operates in different states across the country, staying compliant with sales and use tax is not easy! Given the fact that many states operate with a budget deficit, they continue to change exemptions. On top of that, vendor and accounts payable turnover mean a natural error rate.
How a state defines “nexus”, who the end customer is, how each state treats cloud computing, how the use of the good or service affects taxability, and many other factors complicate the issue further. What you need is a true roadmap to compliance that covers both the sales side and purchase side of the transaction. And it needs to be designed for how you operate your business. The answer is a custom sales and use tax matrix.
Why Is a Custom Sales and Use Tax Matrix Better Than the Alternatives?
When it comes to determining sales and use tax, the tools of the past — an online research library and general tax matrix — had limitations. They were category-based, and ignored the goods or services various usages. General information also limited their coverage to sales tax by state. An online research library and general tax matrix were only ideal for small serviced-based companies without complex transactions.
The custom tax matrix addressed these limitations, while adding additional benefits. With a custom matrix, complex businesses can determine their sales and use tax for the local level while addressing all of the facets that affect taxability. Users no longer had to work with bulky matrices and limited information. A custom tax matrix presented in common language with footnotes covers all applicable exceptions. This sales tax by state table is complete with local tax information. Now businesses are covered at every level!
How Do I Choose the Right Custom Sales and Use Tax Matrix for My Company?
Having the right sales and use tax matrix for your company can mean the difference between compliance and headaches. When considering a custom sales and use tax matrix, it should:
- Be well-researched — You need a matrix that is designed for your unique business, including all of the potential exceptions your company faces. While an industry-specific tax matrix is good, a tax matrix designed for your specific company is even better.
- Include training — The best custom sales and use tax matrices come with complimentary training. During the training, your team should have the opportunity to ask questions and get answers specific to your company’s needs.
- Have free audit support — If any of the determinations come under scrutiny, your custom sales and use tax matrix should work in your defense.
- Include free compliance support — Chances are, you are going to have questions from time to time regarding compliance and tax jurisdiction. You will want an easy way to ask a question and get a fast answer.
Tax Matrix offers custom sales and use tax matrices for companies doing complex business in all industries. Contact us today to learn more about our custom sales and use tax matrix solutions. We offer complimentary audit support should a tax determination ever be questioned, as well as free compliance support and training!