Managing sales tax for retail companies

No industry has experienced massive change and growth over the last few years quite like retail. From strategies like buy online, pick up in store to a boom in ecommerce both global and domestic) to a rise in multichannel and marketplace selling, it seems like there is something new for your customers to pay attention to every few months. And of  ourse, the sales tax rates and rules are in constant flux too.

Achieving compliance

There is a lot that goes into staying on top of compliance for a retail business: determining nexus, registering where you sell, calculating taxes, preparing and filing returns, and  anaging compliance documents. And all of those steps get more complicated if you add multiple sales channels, like marketplaces and global ecommerce.

Accommodating growth

In 2022, U.S. retail ecommerce sales will probably reach $933.3 billion, and global ecommerce is on track to surpass $7 trillion by 2025. If you’ve adopted new sales channels  r expanded your customer base, you’ve probably noticed that it takes more resources to keep up with sales tax jurisdictions, regulations, and managing VAT.

There isn’t just one busy time of year for retail sales, either; it seems like as soon as one seasonal event ends, you’re already gearing up for the next one. That doesn’t leave  uch time for tax compliance tasks like keeping track of sales tax rates, adjusting for returns, and staying on top of sales tax holidays. If you’re doing it all manually, you could be  osing valuable time and resources.

If the idea of entering new sales tax data into your system every time you gain an out-of-state customer or your county announces a sales tax holiday fills you with dread, it  ight be time to automate. Avalara AvaTax provides tax rates delivered at the time of sale, taking into account geolocation and product taxability. It even addresses state sales  ax holidays.

The customer experience

Your customers expect a seamless checkout experience across all your sales platforms, but not all stores are equipped to calculate tax in a buy online, pick up in store event  nd not all sales channels or marketplaces can collect exemption certificates or automatically calculate the correct taxes and duties. These failures can negatively impact your  eputation with customers, not to mention leave you open to costly fines for noncompliance.

There is a solution

Together, we can help your customers keep up with the ever-changing retail tax landscape with tax automation tools like Avalara AvaTax for Retail, Avalara Returns, Licensing  amp; Returns, Avalara Consumer Use, and more.

Explore options here or contact your account executive for more information.

To stay up to date on all things retail tax, keep an eye on Avalara Tax Desk.