With the complexity inherent in sales tax compliance, customer service should be the top priority for businesses when choosing a solution. Sales tax is complicated as we just experienced another season of back-to-school tax holidays. Remote sellers of clothing selling both through retail channels and direct-to-consumers face a particularly challenging landscape of varied state rules. In some states, total annual revenue determines the filing threshold, not just direct sales. Other states require ongoing filing once registered even with no current sales. With this type of multi-faceted complexity across hundreds of taxing jurisdictions, the focus keyword of customer service is key. Opting for a solution with knowledgeable, accessible customer support is vital when questions and issues are sure to arise while navigating the ever-changing regulatory scheme.
For all the states where you’re registered, you must find out when the sales tax holidays are, and whether any of your products are tax-exempt. Sometimes there are price limits, so that items under $100 are tax-exempt and higher-priced items are not. In Tennessee, belts are exempt but belt buckles are not. Many cities in Missouri decided not to participate in their state’s sales tax holiday. In Illinois, items aren’t tax-exempt but rather have a lower tax rate during the holiday. We could go on. And on.
And that’s just the sales tax holidays. There are also everyday sales taxes. Wayfair (you remember them from Wayfair vs. South Dakota) is suing the city of Lakewood, Colorado, for the complexity of its tax code. Lakewood has been charging sales taxes on delivery fees, and Wayfair is not the only business that’s up in arms, but Wayfair says they won’t tolerate “complex, overlapping and competitive sales tax ordinances.”
Complex, overlapping, and contradictory is pretty much par for the course when it comes to sales taxes.
Because sales tax regulations are so complex, remote sellers in particular are about ready to give up. You may now have nexus in all 50 states plus the territories, not to mention cities and counties. Any business now can be subject to hundreds or even thousands of jurisdictions. Each jurisdiction may have not only its own definition of taxability and threshold but also a different calendar for filing.
What’s more, the regulations change frequently. Responses to the changes can’t all be automated. And your business will probably have some specific issues that won’t be automatically covered by a sales tax engine.
You need good customer service.
For many of the pieces in your tech stack, you’re fine with any vendor as long as you don’t have a problem. Web hosting? You’re okay unless you have a problem, and you probably won’t have one even once a year. Phone lines? No problem unless there’s a problem, and most American cities have stable phone service.
Sales taxes? You’re almost sure to have a problem. The entire system is so convoluted that nearly everyone has a problem at one time or another.
So what’s the customer service like with your sales tax solution? One of the biggest sales tax software companies has overseas help desks for all questions. If you want to talk with someone in the United States, you have to put in a ticket and you might wait weeks for a response. Oh, and you also have to pay extra.
If you haven’t tried Sales Tax DataLINK…
Try Sales Tax DataLINK. We’re affordable and accurate, and we have American CPAs who will help you any time you need support. Call 479-715-4275 and let us impress you.