Sales & Use Tax Software — 2005

Nexus — a five-letter word? Count again, please. Webster’s defines it as follows: Latin, from nectere to bind; CONNECTION, LINK; also: a causal link — a connected group or series — CENTER, FOCUS. Actually, I was certain that “NEXUS” just had to be a new book on the New York Times Bestseller List. Much to my chagrin, and to the doubt of affected clients at various moments in time, I began to learn the real meaning of the word nexus. Oh joy! Surely though I rode into the valley of death, I would meet a client who would greet my thoughts on nexus with other than skepticism and a burning desire to see me committed. This simple Latin word was definitely FOREIGN to all of us.

Quickly, we learned that if the rules of nexus applied there would be more states, cities and local jurisdictions for which my clients would have to collect, report, and remit sales and use taxes. Nexus — a compliance term that continues to evolve. Nexus results in added sales tax complexity, with increased responsibilities in calculation and determination of tax due, requiring intelligent understanding together with correct application of the underlying sales and use tax law and rules.

For sales and use tax purposes, Nexus means that a business has sufficient connection to another state, such that the other state can cause the business to collect and remit sales taxes. A business that has nexus to a state is, therefore, conducting or “doing business” in that state.

The good news is that no matter what your needs, the right sales and use tax application exists. Arguably, few areas of financial programming rely on DATABASE functions as do sales and use tax programs. It’s been said before, but return on software investment relates to the quality of information that can be extracted and used. So choose wisely. From small to large businesses, for preparers in public accounting or commercial enterprises, for administration in simpler or complicated environments, or for those involved in electronic commerce, the applications are here, and they are evolving as the needs of current users are met.

The Sales and Use Tax applications reviewed here can assist in automating the compliance process while reducing time spent in (formerly) manual tasks. Performance of specific compliance tasks is the real variable. Some applications are offered online or through hosted sites; others are loaded onto a local network or workstation, while still others function and work from programs and databases that reside on a CD-ROM. Some programs function to calculate and print forms from user-supplied input, while others can accept large amounts of detailed sales tax transactions in real time as they are linked to commercial accounting or electronic commerce programs. AND there are a number of programs that function in between the low and high end of things. Performance of related tasks like address validation is a real plus, allowing for fewer returns, lost shipments and improved collections. After all, the bill might not make it there either!

Form nuance to niche, let’s have a “look-see.”