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Sales & Use Tax Software — 2005

Yes, compliance. Forms and remittances are due at regularly scheduled intervals. Sound familiar? Sure, it’s a monthly chore for most businesses, while others prepare forms and remit on a quarterly, semi-annual and annual basis. Today, remitted taxes are important to the operation of every level of government.

Yes, compliance. Forms and remittances are due at regularly scheduled intervals. Sound familiar? Sure, it’s a monthly chore for most businesses, while others prepare forms and remit on a quarterly, semi-annual and annual basis. Today, remitted taxes are important to the operation of every level of government. The order of the day is for businesses to report accurately, to provide information in specified formats that are easily received by taxing jurisdictions, to remit faster, for returns to be prepared in scannable laser-printed formats, and to be filed electronically. Easier? I really haven’t run across that attribute yet.

Some businesses have a simple and clear-cut data path towards determination of sale and use tax due. These businesses operate in one city and state, and sell a handful of items or less, with sales tax collected based upon a single, simple-to-administer tax rate.

Other businesses operate in multiple or all states, and in various cities, districts, parishes, etc. These businesses face the potential of applying rules that may be promulgated at the state, city and local levels. Conflicting rules be gone! NOT. Many of these companies require detailed, up-to-date sales and use
tax rate databases, maintenance of which is a daunting undertaking to say the least.

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.”

AccountantsWorld — Sales Tax Online
Web-based computing is the mantra of AccountantsWorld and its Accountant’s Office Online (AOO) suite of programs, including Sales Tax Online.

Avalara — AvaTax ST
AvaTax ST is somewhat of a newcomer to the Sales and Use Tax application marketplace and is aimed at small to medium-sized businesses. AvaTax ST is a hosted sales and use tax web service.

BNA Software — BNA Sales & Use Tax Rates & Forms
BNA Software offers a comprehensive sales & use tax application that can be employed in a variety of configurations.

CCH Tax and Accounting — CertiTAX, ZipSales Returns & ZipSales Database/Lookup
CCH’s sales & use tax solution is a combination of services including the CertiTax product suite, ZipSales Returns and ZipSales Database/Lookup with Taxability, and

CFS Tax Software, Inc. — Sales Tax Preparer (CA & NY)
CFS Tax Software offers separate editions for California and New York. The Sales Tax Preparer will calculate state, city and local taxes and prints fully approved state forms on blank paper. The California program calculates and prints Form 401 with Schedules A, B, C, G and T, Form 401-EZ, prepayment Form 1150, plus 13 other forms and applications.

Electronic Sales and Use Tax, Inc. — is a California State Board of Equalization Authorized Website that handles electronic filing and payment of California sales taxes, otherwise known as an ERO — an Electronic Forms Originator. is also now available for
sales and use tax filing in Louisiana.

Taxware — Taxware Enterprise & TaxSolver
Taxware’s applications are targeted at medium- to large-sized enterprises. Taxware Enterprise determines sales and use tax liabilities for over 8,000 state and local jurisdictions in the United States, as well as Value Added Tax (VAT) and other consumption taxes for more than 150 countries worldwide.

Thomson RIA Compliance — InSource Sales & Use Tax
InSource is a comprehensive, Windows-based software product that produces over 560 state, local and Canadian returns, including 190 returns in the 46 states and the District of Columbia; 270 local returns in the states of AL, AK, AZ, CO, ID, IL, LA and MN; and returns for Revenue Canada (GST/HST), British Columbia, Manitoba, Ontario, Quebec, Saskatchewan, and Prince Edward Island.

Trustfile — Trustfile Sales & Use Tax Software
Trustfile offers sales & use tax programs for 11 States, including CT, FL, GA, IL, LA, MD, NJ, PA, SC, TN and WI. State programs are sold separately and maintained in separate program folders. Trustfile lists approximately 16,000 customers, including 22 percent of the Fortune 100, who collectively process over $8 billion dollars a year in electronic payments.

Sales & Use Tax — Executive Summary
We have looked at a number of products here, from simple to highly sophisticated and lower-end to high-end cost. The best match won’t be found in a single product; rather, selection and successful implementation will depend on user computational needs and the product’s ability to satisfy applicable compliance requirements.