2012 Review of Sales & Use Tax Compliance Systems
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For businesses with more complex or frequently changing sales tax collection requirements across large numbers of jurisdictions, especially those with higher volumes of transactions, Integrated Sales Tax Rate Engines are more focused on getting the right sales tax rates into a transaction in real-time. These are generally web-based tools that connect a business’ sales, accounting and/or e-commerce systems to a live database of sales tax rates, rules and special variables, usually for every taxing jurisdiction in the country, with a few even covering Canada and VAT/GST abroad. These are very powerful programs that take into account all aspects of taxability, and they can do it in under a second, while a transaction is being processed, and insert the applicable taxes into the transaction as a line-item.
These integrated systems also offer automated preparation, taking the data from the transactions and preparing review-ready, print-ready forms for all jurisdictions, and can include alerts to notify users of pending deadlines. The programs in this category do not offer direct e-filing to the states, but the vendors offer optional compliance services through which they will handle all aspects of printing, filing and remittance.
The type of program best-suited to a particular business depends on their transaction volumes, the number of jurisdictions they have reporting obligations to, the complexity of the products they sell, and the value to them of having instant rate lookup and application to a transaction.
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