Like most states, Texas has many jurisdictions in which local taxes must be accounted for. This can be a real headache for business with nexus in the lone star state. Take Bergquist, national distributor of propane related equipment and sales for example. In Texas, Bergquist must collect state taxes at the rate of 6.25 percent plus an additional .5 percent based on the customer’s county. And this varies by location, with each county, city and municipality having a different rate. Keeping Texas sales tax rates current throughout the year is a can become a real drain on any businesses accounting department. But don’t take my word for it.
Meet Sandi Lemmon, accounting specialist for Bergquist.
“It was horrible,” Lemmon says. “They send out half-inch paper booklets listing every possible taxing scenario that determine, based on ZIP code, which jurisdiction taxes have to be collected for particular customers within that ZIP code. And then the state of Texas would send updated booklets saying, ‘Okay, here’s the tax increases and decreases for all these counties, cities, etc.’ It became humanly impossible to keep up with this once we added the Texas nexus.”
Sandi’s situation is not uncommon. Read a recent case study featured in IBM Systems Magazine. Learn how Sandi simplified the process by leveraging Avalara’s cutting edge sales tax compliance solutions.