In today’s economy, state sales tax audits are increasing. States realize that increased diligence in performing audits is one method to help increase revenues. Whether it’s in your initial calculation, handling of documentation for sales tax exempt transactions or in sales tax filing and reporting, your business processes can increase your risk of exposure to audits. But reducing risk doesn’t have to be a painful experience.
Businesses using Microsoft Dynamics financial applications have a terrific option that enables them to be proactive in sales tax compliance while reducing audit exposure and risk: sales tax process automation.
Avalara partners with Summit Group Software and other Microsoft resellers to ensure customers have a built-in, automated process for accurate sales tax calculations, management of customer exemption certificates and sales tax filing and remittance. Easily integrated with Microsoft Dynamics products, the Avalara AvaTax solution provides three of the critical items you need to avoid sales tax audits or survive them:
Accurate sales tax calculation – The steps to avoiding the negative impact of a sales tax audit begin with accurate calculations. Many businesses think that merely looking up the zip code location is enough to provide accuracy. Unfortunately, this is not true. In Alaska, one community discovered that they had been overpaying sales tax for two years just because local businesses assumed the same zip code meant same sales tax. In actuality, the higher sales tax only applied to a small area of the zip code that fell into the local jurisdiction’s special tax district.
- AvaTax Calc provides your business with unparalleled accuracy in sales tax calculation. Our geo-coding enables us to ensure calculations are accurate “down to the rooftop” to prevent incorrect sales tax application.
Sales tax exempt transaction documentation – In other words: exemption certificates. What happens when you have customers who qualify to not pay sales tax on some purchases? Not only do you need to manage verification of that qualification by ensuring you collect and retain their customer exemption certificate, but you also need to ensure that the products they are purchasing qualify. If you manage more than a few products, this can be challenging. Add more than one state where you do business and you have a management nightmare.
- AvaTax Certs uses a built-in intelligent exemption certificate management process that ensures a workflow that reduces tasks, improves visibility and accessibility of information and associates the customer and certificate for current and future purchases.
Reporting and remittance – Once you’ve done due diligence to ensure accurate calculation and proper documentation for non-taxed transactions, you must file and remit the sales tax liability to each jurisdiction or state. Timely filing and responses to notices are critical to this part of sales tax compliance. Accurate reporting begins with accurate calculations and ends with timely payment if you want to avoid the auditor’s notice.
- AvaTax Returns delivers timely filing and improved Treasury control through a single payment process that reduces the burden on your tax department and bank account. AvaTax takes care of all the individual payments to each jurisdiction as well as filing returns. After returns are filed, AvaTax ensures notices receive prompt response and visibility to you.
There is no magic to guarantee that you will never be audited, but automating the process can help your business provide up-to-date, accurate calculations, proper documentation for non-taxed transactions and correct sales tax returns.
Learn more about AvaTax for Microsoft Dynamics users today by downloading a complimentary copy of Avalara’s “Sales Tax Survival Guide.” This guide will help you better understand the challenges and navigate the risks associated with sales tax collection. In addition, it will provide strategies that can minimize these risks for your business, while reducing the resources needed to manage the sales and use tax burden. Download now < https://www.avalara.com/Media/DownloadDocs/Whitepapers/survivalguide_2011?blgr392 >.
