Complying with Sales and Use Tax

Compliance is comprised of four main areas:

  1. Registration and collection.
  2. Return preparation and filing.
  3. Exemption certificate management.
  4. Audit management.

All companies, regardless of their size, will be required to address items 1 – 3 at some point during the business lifecycle. Once nexus has been decided and registration with the jurisdiction is complete, the company must collect taxes. This includes assigning taxability and tax to products or services, and instituting a collection process. Point-ofsale retailers have a fairly simple tax collection task: programming cash registers to apply and capture the tax on the correct items at the time of sale. Wholesalers and manufacturers have few issues with tax collection, but have a larger concern with managing exemption certificates. Companies that sell directly to end users in multiple states and that have nexus in multiple states have the greatest challenge related to taxation.

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Published By

Avalara

Welcome to Avalara. We’ve been disrupting the status quo in the “scintillating” world of sales tax management since 2004, and we continue to blaze new roads in this very old industry.