Avalara Survey Reveals Natural Gas Adoption Rising While Tax Compliance a Critical Challenge
- Nov 18, 2014 | Avalara
Sixty-seven Percent of Respondents Selling or Using Natural Gas Cite Staying Current with Excise Tax Regulations Their Biggest Challenge
Houston TX, November 18, 2014 – Avalara, Inc., (www.avalara.com), a leading provider of cloud-based software that delivers a broad array of compliance solutions related to sales tax and other transactional taxes, today announced new survey results highlighting growing fuel and trucking business challenges related to natural gas tax compliance. Almost half the respondents are currently selling or using natural gas as a motor fuel. Sixty-seven percent claimed that staying current with the evolving natural gas tax regulations and rates is their biggest challenge.
The survey also reflects that 32 percent of respondents currently selling or using natural gas are unaware that they may have state excise tax liability. Working with many of the largest fuel retail, distribution, and fleet companies in the U.S., Avalara’s Excise Tax Division provides automated solutions to help companies combat the complexity of natural gas tax determination and compliance.
“With increased use of natural gas as a transportation fuel, companies are facing more and more tax compliance challenges,” said Matt Tormollen, EVP/GM Avalara Excise Tax and CertCapture Divisions. “Adding to the extensive regulatory complexity is the fact that many companies use error-prone, manual processes to calculate or file natural gas motor fuel taxes. We are seeing more companies look to simplify and centralize natural gas tax processes with tax automation.”
According to the survey findings:
Natural gas usage is strong and is expected to rise over the next few years
- Natural gas is part of many companies’ current businesses as 32 percent of those surveyed are currently selling or using natural gas a motor fuel.
- Fifty-five percent expect sales or usage of natural gas to increase in the next three years.
Future company business plans feature natural gas sales or usage
- Thirty-six percent have it under review.
- Thirteen percent plan to adopt in the next 1-3 years.
- Five percent plan to adopt in the next 3-5 years.
Natural gas sales and usage as a transportation fuel presents tax compliance challenges
- Sixty-seven percent of respondents who are currently selling or using natural gas consider their biggest challenge to be staying current with the evolving natural gas tax regulations for each state in which they operate.
- Thirty-two percent of respondents were unaware that they may have state excise tax liability if they sell or use natural gas as a motor fuel.
- Thirty-eight percent were not aware that many states are actively considering new taxes for natural gas used as a motor fuel.
Calculating and filing natural gas motor fuel taxes is still an error-prone manual process for many
- Forty percent use spreadsheets to aggregate and summarize data when filing motor fuel taxes for natural gas.
- Twenty-three percent manually calculate using calculator or spreadsheet to identify and calculate taxes charged to customers when selling natural gas as a motor fuel.
Avalara Excise Solutions:
Avalara AvaTax Excise and Avalara Returns Excise automate the fuel excise tax calculation and filing process for transportation fuels, including natural gas. Avalara enables companies selling or using liquefied natural gas (LNG), compressed natural gas (CNG), or propane (LPG) fuels to reduce filing costs and ensure tax compliance. Avalara has experts on staff who understand natural gas taxation and actively follow each state and local tax authority for changes to rules, rates, and forms that are required for businesses to maintain compliance.
About the Survey:
Avalara conducted the online survey of over 120 fuel industry companies during May and June 2014. Respondents included fuel retailers, distributors, and suppliers, along with fleet and trucking companies.
Avalara helps businesses of all sizes achieve compliance with sales tax, excise tax, and other transactional tax requirements by delivering comprehensive, automated, cloud-based solutions that are fast, accurate, and easy to use. Avalara’s end-to-end suite of solutions is designed to effectively manage complicated and burdensome tax compliance obligations imposed by state, local, and other taxing authorities in the United States and internationally.
Avalara offers hundreds of pre-built connectors into leading accounting, ERP, ecommerce and other business applications. The company processes millions of tax transactions for customers and free users every day, files hundreds of thousands of transactional tax returns per year, and manages millions of exemption certificates and other compliance related documents.
A privately held company, Avalara’s venture capital investors include Sageview Capital, Battery Ventures, Warburg Pincus, Arthur Ventures, and other institutional and individual investors. Avalara employs more than 750 people at its headquarters on Bainbridge Island, WA and in offices across the U.S. and in London, England and Pune, India. More information at: www.avalara.com