Best ways to handle sales tax compliance

Summary-

  • Sales Tax compliance is complex as the rules and regulations are different for every state.
  • Tax experts expect new tax issues to pop up in the new year.
  • As your business gets ready for the new year, having a plan for the sales tax is important.
  • This blog contains tips for Indian sellers to handle sales tax compliance.

While you are packing your bags and getting your business prepared for the new year, there’s a little bit of salt coming your way in the form of sales tax issues. As more and more tax experts foresee sales tax issues knocking on doors like uninvited guests in the year 2022, most retailers are pounding their keyboards looking up for numbers, facts and predictions. Although we encourage our clients to plan for the future, predicting it might not be the best way. Instead, Indian businesses should beat their tax complexities by having a flexible, dynamic and robust strategy for compliance that will help them tackle the uncertainty.

If you want to get a total sales tax makeover for your business in the year, this blog will help you. We have compiled this list to bring to you the best ways to handle your sales tax compliance.

1. Keep a plan to check on the changes to tax liability due to changes in nexus rules. Here is the bad news for businesses- Every state has different rules regarding what establishes nexus, and these rules, like any other tax laws, keep changing. Many businesses are unaware of the recent changes. Therefore, getting well versed with the rules and staying up to date becomes essential. In addition, you will have to ensure your business is registered where it is required to be and mind the collection and remittance. Apart from that, being constantly vigilant about whether you have unknowingly or without being aware triggered nexus.

2. Keep the Use Tax on your bulletin. Since Use tax is on tangible products that are not charged sales tax, many businesses miss recording them, which becomes a starting point of trouble for many. So if that’s where your business is going, you should watch your head.

3. Know the deadlines and due dates of remitting taxes and filing returns. No business wants to miss deadlines. Everyone dreads heavy penalties and fines and added complexities. The best way to avoid them is to get done with them proactively. Maintaining tax calendars helps businesses.

4. Seek help from tax professionals. Day to day sales tax hassles need you to not only understand taxes but also be a pro at them. Many businesses choose to offload the tedious tax process to tax professionals. However, hiring professionals can also be expensive, especially in a market like ours. The recent trend observed in Indian Ecommerce is adapting digital transformation across multiple verticals. More and more businesses are embracing automation of tax compliance with the help of software like AvaTax for cheaper, faster and error-free tax help.

Avalara helps businesses of all sizes cover their tax compliance needs. We have software solutions for Sales Tax, EU VAT, Cross border selling and GST. We are constantly encouraging more and more Indian businesses to embrace tax automation to accelerate their growth and leverage their business in competitive markets.

Are you wondering how digital automation could help you? Here is why you should switch to a digital tax compliance process. We keep sharing tax content, updates and news relating to indirect taxes for our viewers. Check out more blogs from Avalara to get everything you need about the recent changes.

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