The subject of Use Tax calculation has been a topic of much concern and discussion over recent months.
One reason is the Marketplace Fairness Act — which is pending approval by the US Congress — that will require state governments to collect sales taxes and use taxes from online retailers with no physical presence in their state.
Currently, 45 states and the District of Columbia have a sales tax. Consumers in those states are expected to report their online purchases and pay sales taxes on them each year.
In reality, that rarely happens.
As a result, states lose an estimated $24 billion each year in unreported online purchases. The Marketplace Fairness Act would require the collection of these revenues by compelling retailers with annual e-commerce revenue over a given amount to collect state sales tax on remote sales.
If the bill passes this year online retailers will have to pay sales tax regardless of where they operate. Many businesses will struggle to respond.
Despite the increasing digitization of businesses today, many organizations still rely on antiquated, manual and paper-based systems.
As a result, Use Tax calculations ‘by hand’ can be very time consuming and error prone. And with new state and federal expectations around the corner many companies will find that keeping up with new expectations and surviving frequent compliance audits will be a problem.
Accounts Payable automation changes all that. With intelligent data capture and flexible workflows, AP automation solutions (like DocStar ECM AP Automation) automatically calculate Use Tax, and when used with a document management platform, the entire process is efficient, accurate and ensures compliance.
The burden of paper is eliminated and you get more detailed insights into the performance of the process.
You’ll not only reduce costs but you’ll also be assured that your Use Tax processes be compliant.
You need to be ready for regulatory and compliance changes before they happen.
Check out our recent webinar – Secrets of World Class AP Departments to learn what organizations just like yours are doing to stand out from the crowd. Learn from Ardent Partners and DocStar experts how to be prepared for the next big thing in your industry!