Streamlining your sales tax compliance process doesn't just reduce your risk exposure but also saves valuable time. It also instils a sense of security. But, making the wrong choice in selecting a partner can lead to unforeseen and escalating expenses.
This list exposes nine subtle yet significant fees that often slip under the radar if you aren’t careful. From quotes to penalty and interest indemnification, this list is designed to equip you with the insights needed to navigate the complex landscape of sales tax compliance with confidence and clarity. We empower you to find financial transparency, proactively manage your financial obligations, and optimize your sales tax compliance strategy for long-term success. It can be done by shedding light on these covert charges, giving you a sense of control and empowerment.
Hidden Charges in Sale Tax & How to Avoid?
There are many hidden charges when filing sales tax returns. It involves:
1. Sandbox
Testing new solutions should come with something other than a price tag. Yet many vendors charge a fee for the use of their sandbox. Seek vendors who understand the importance of robust testing environments and provide sandboxes without added fees.
2. Quotes
Generating quotes doesn't directly contribute to your revenue stream, yet numerous sales tax automation vendors still charge clients for each quote generated. Choose a vendor that provides sales tax on quotes without additional charges.
3. Abandoned shopping carts
Other charges that don't directly generate revenue that vendors may slip in are billing customers for abandoned shopping carts that never result in a sale. Partner with transparent sales tax vendors about their pricing policies, ensuring you won't be billed unexpectedly for non-revenue-generating activity.
4. Notice Resolution
Managing notices and jurisdictional correspondence is a standard piece of your filing and remittance process, but most providers still need to include this in their primary service offerings. At least with you alerting them of the notice first. Many providers charge for this as additional customer support, separate from your filing process.
5. Custom Reporting
Part of your monthly sales tax process is reconciling your General Ledger monthly. Making the proper journal entries can be challenging in some situations. Receiving a customized journal entry report specific to your chart of accounts can streamline the reconciliation process. Are you aware of the charges, if any, associated with custom reports like this?
6. Support
Getting quick answers to your questions from people who know what they're talking about is critical for end-to-end sales tax compliance. Many vendors charge for their top-tier support, and even then, teams have delays as they try to figure out the answer. Find a vendor with real sales tax expertise that doesn't charge you extra.
7. Consulting on Sales Tax Approaches
As your business grows and evolves, so do your sales tax obligations. What if you add a new product line with different taxability rules, open a new sales channel or are sent an audit notice? If your provider has the expertise to answer these questions, it is likely for an additional charge. Ensure you understand the charges associated with your questions, changes and support.
8. Overages
As your business grows, numerous vendors impose fees that scale with your growth, making it difficult to budget for your sales tax solution and potentially exposing you to unexpected renewals. Choose a vendor offering consistent pricing, allowing you to budget confidently as your business grows.
9. Anything But the Basic SUT Filings
Sure, your standard sales tax filings are covered under your standard service offering, but what about other less standard non-pass-through taxes often needed on your SUT returns? For example, the Washington B+O tax is not presented on the invoice but is due and reported on the sales tax return. Other providers file a simplified sales tax return and do not file the B+O return unless you ask for it and then pay separately. Make sure you are fully compliant and not being charged extra for additional filings such as – WA B+O, OH CAT and more.
Hidden Charges in Filing Sale Tax Late
There are many hidden charges when filing sales tax returns. It involves:
Penalty & Interest Indemnification
While not necessarily an additional fee you would see on a bill, penalties and interest related to late or missed filings or payments often flow back to you as the tax collector. Choose a provider who can indemnify their work so that you won't receive penalties related to late or missed filings or payments, including missed filings related to filing frequency changes, which may be missed if they aren't monitoring your notices!
Winding Up Thoughts
Looking for end-to-end sales tax compliance that isn't going to tack on substantial usage fees that penalize you as you grow and don't nickel and dime you for every little thing? Fino Partners is the complete solution you've been looking for. With predictable, hassle-free, and transparent pricing, you can budget confidently without worrying about surprise fees or jumping through hoops. It's simple to understand pricing, which makes sense and provides a sense of relief from hidden costs.
Fino Partners provides the full spectrum of consulting, calculation, and compliance. In Fino Partners, your entire process is managed by seasoned professionals. It is done from start to finish and is done by experts with collective tax knowledge. Get in touch to work with a transparent company with the expertise to take sales tax off your plate.
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