Controlling the sales tax function: A human and digital partnership

After the 2018 Wayfair decision, many sellers are now required to collect sales tax from customers in more U.S. jurisdictions. Some companies are preparing for future purchases in new U.S. jurisdictions due to planned reshoring or adopting roboticized operations. Even for companies with minimal changes in reporting jurisdictions, the fast pace of sales tax legislation and regulatory changes calls for close management of the sales tax function. While sales tax automation tools have changed how companies comply with sales tax, human supervision remains essential. The management of the sales tax function overlaps different areas and can occur at a fast pace, requiring assistance even for companies with in-house sales tax professionals and full automation. The sales tax function should be aware of the company’s U.S. sales and use tax reporting obligations, especially before acquiring sales tax nexus. Identifying new jurisdictions to report and remit sales and use tax before the transaction occurs is crucial for timely billing and avoiding late payment interest.

Source Alvarez and Marsal

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