Sales tax compliance software helps businesses utilizing customer-facing transactions apply the appropriate local and federal rules and rates so the correct taxes are collected. Staying up-to-date with changing rules and exemptions is required by law, and these tools ensure the full transaction lifecycle is aligned with any relevant jurisdictions—which can vary depending on the number of markets a business serves. Business owners, customer support teams, accounting teams, and e-commerce administrators in a variety of industries use sales tax compliance products to oversee tax collection and filing for all sales transactions, also known as indirect tax. This includes adjusting sales tax prices for certain products, customers, or occasions where necessary, such as sales tax holidays or after a customer’s change in circumstance, along with any update to official regulations when new legislation is passed. Proper use of these tools will greatly reduce the effort in tracking customer and rate data, as well as minimize the risk of any oversight that could result in customer dissatisfaction, missing funds, or legal ramifications. Some sales tax compliance tools will also send notifications for important tax filing dates or required paperwork. These systems often integrate with ERP systems and accounting software to ensure budgets, profits, and projections are accurate across the organization, as well as POS and e-commerce tools so taxes are correctly represented to customers and collected in transactions.
To qualify for inclusion in the Sales Tax Compliance category, a product must: