Defining and Developing a Sales Tax Automation Cycle with Judy Vorndran
In this episode of the SALTovation podcast, Judy Vorndran discusses the vital role data plays in sales tax compliance, especially in an era where businesses often operate beyond traditional storefronts. She elaborates on why software often fails to completely address tax needs, and takes an in-depth look at the complexities introduced by home rule jurisdictions and how they influence the overall tax compliance profile of a business.
*The number of taxing jurisdictions in the U.S. is hard to capture at any one point since it is a moving target. As of June 2024, by some counts, there were over 13,000 taxing jurisdictions combined from 45 states and the District of Columbia, which have a general sales tax, and 38 states with local sales taxes.*
Topics discussed in this episode:
- Data Integration: Properly integrating billing, inventory, and customer data is crucial for accurate sales tax compliance.
- Software Limitations: Many software solutions offer a minimum viable product that may not cater to specific business needs, highlighting the importance of manual oversight.
- Nexus and Tax Mapping: Understanding what constitutes nexus and accurately mapping taxability are key to avoiding compliance pitfalls.
- Home Rule Complexities: Jurisdictions with home rule can significantly complicate the tax compliance process, requiring businesses to stay informed about various state and local regulations.
- Automation Cycle: The cycle encompasses data gathering, system integration, and continuous updates to reflect changing tax laws and business operations.
Quotables
- "You need to understand all the things in the cycle, the entire machinery in your business process. We have had to morph our world of automation to understand that process." -Judy Vorndran [13:25]
- “The issue with home rules is that we don't have one system of record. We have several home rule states where there are separate filings for the cities than there are from the state. We have a subsystem” -Judy Vorndran [21:33]
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