The Tax Manager & The NFL Offensive Lineman: Fuel Taxes in Football Terms
Q: What does your indirect tax manager and an NFL offensive lineman have in common?
A: The only time you hear their names is when a penalty is called.
Your sales team has numbers they publish on a quarterly basis, and when they beat their numbers, there is a big celebration. But, when your tax manager determines and files all the taxes correctly and on time, silence is all he hears. So far this year, the U.S. has had 216 tax rate changes. If your tax manager’s staff correctly researched and found all of these rates, then it’s business as usual. But, what happens if they missed 10 of these rates? In this case, the staff was 95.3704% accurate in correctly capturing these rate changes, yet the tax manager will still be called on the carpet for those that were missed.
If you operate in all 50 U.S. states, there are over 28101 rates to be monitored and updated every month. If all but 10 of these rates are accurately captured, the tax department’s accuracy rate would be 99.9640%, yet the tax manager would STILL have a problem because 1) your customers will be upset and 2) your company will incur the costs of all those credits and re-bills. Because of those 10 missed rates, margin calculations would have to be done on all sales, and the repercussions of those missed rates would cascade through your organization causing lower margins, lost productivity due to credits and re-bills, and other rework related issues.
Therefore, it’s possible that what seems to be your company’s “touchdown” will get called back because the tax manager is “holding on the play”. Even worse, picture this scenario: it’s the 4th quarter, and the company’s financial numbers are just about to be reached. Your sales team is on the 1 yard line with 4 seconds on the clock when, suddenly, your team hears a whistle. A state auditor just found errors in your tax filing, and your team is penalized with fines, fees and interest all because your tax manger missed 10 rates! Now, it’s suddenly 4 seconds on the clock, and 6 yards instead of 1. No one cares that the manager had 28,091 rates correct. The only thing anybody cares about is that the company will not make its profit numbers because the tax manager missed 10 rates. That’s when the announcer says, “These guys cannot afford mental mistakes like that. They are killing this team.”
If this situation sounds at all familiar, maybe it’s time you helped your tax manager by automating the entire tax calculation and filing process. With tax automation software purpose-built for calculating and filing motor fuels excise taxes, you can reduce filing costs while improving return accuracy and minimizing business and compliance risks. With this in place, maybe your tax manager won’t hear his name called during your next “big game”. And, that’s probably just how he likes it.
The 2021 sales tax changes report: midyear update
Your guide to navigating the complicated world of tax compliance and preparing for the future
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