Pitney
Bowes Software, a global leader in customer data, analytics and
communications management, today announced a series of tips to help
businesses navigate the highly complex geographical component involved
in various tax calculations. During an audit, many U.S. businesses
discover that inaccurate or outdated geolocational data has led them to
take too much or too little tax on customer payments or employee
withholdings. For example, if a residential property line or a
municipality's boundary moves in any direction, it could have important
tax implications.
With tax season fast approaching, Pitney Bowes Software offers the
following Top Tips for dealing with various geolocational tax
requirements:
- Don't rely on the postal system for establishing tax rate -
Many companies use the postal system to verify addresses to establish
the rate payable for various taxes such as sales tax, payroll tax and
personal property tax. The postal system was designed to deliver mail
not determine taxation and the postal boundaries do not align with the
taxing areas. Also a number of premises are not assigned postal
addresses, often leading to miscalculations. In addition, 20-30
percent of municipalities change their boundaries each year, making it
difficult to keep up with precise tax jurisdictions. Companies need to
access and upload a verified tax code provider list in order to manage
each location.
- Calculate the sales tax requirements for all sales locations -
This is particularly important for companies selling goods or services
over the Internet. Traditionally it has been a consumer responsibility
to declare out-of-state Internet purchases and pay use tax, an
impractical process to date. As a result states are moving to place
the burden on the seller and many businesses have voluntarily signed
up to aid in this effort. Congress is currently considering federal
law changes that will mandate sellers to collect sales tax.
- Closely track any mobile assets to establish their whereabouts -
Companies must establish the location of all the mobile assets. From
vending machines to telephone cable, each is taxed and often audited
according to their exact location on a given date.