With July around the corner, sales tax rate changes are on the way. There are hundreds of local municipal sales tax changes in the wings but Kansas is making the biggest sales tax rate change of all. State legislators have voted to increase the state sales tax to 6.5%. Is your business ready to implement these changes?
Dealing with Sales Tax Rate Changes
How does your business handle sales tax rate changes? Ideally, the process is as automated as possible and doesn’t require hours of work from your IT staff. Instead, your software should automatically update and implement new sales tax rate changes as needed. If you’re not using cloud-based sales tax software, this is unlikely the case.
Keep in mind that sales tax rates change constantly. How much time is your IT department spending on sales tax rate changes? Don’t know? Ask your IT staff to keep a log of how much time they spend managing your sales tax software over the next two months and take a look at the results. What you find might surprise you.
IT staff is expensive—there’s no doubt about that. The workforce is habitually the biggest expense for business and IT is often the most expensive category of all staffing. If you could cut down on the time your staff spends managing sales tax software, how much could you save?
How to Verify Sales Tax Changes
Sales tax changes are essential to calculate the correct sales tax rate at the point of sale. Without the right rate, it is impossible to calculate sales tax accurately no matter how to correct all the other data is. Sales tax rates are the easiest part of the sales tax calculation to get right 100% of the time.
During sales tax filing, your sales tax accounting staff should audit invoices to ensure that sales tax rates were updated in a timely fashion to comply with any sales tax changes. Of course, doing this manually is an accounting nightmare. There are three options when it comes to sales tax rate changes and filing:
- Don’t do anything and trust your IT staff didn’t drop the ball or make a mistake
- Check a random assortment of invoices manually and hope you found all the sales tax rate errors
- Use sales tax filing software that audits every transaction
The last choice is the best, above all. If you’re not verifying that every transaction used the correct sales tax rate, your company has no way of knowing there weren’t major mistakes in your sales tax reports.
Learn more about how you can verify every transaction for correct sales tax calculation in minutes with FileLINK and how incorporating better sales tax rate data can cut down on time spent updating sales tax rates.