Options ranging from sales tax consultants to done-for-you sales tax services to automated sales tax software all claim to take the hassle and stress away–but not all solutions are the same–and not every solution is an ideal fit for every business.
In an industry where one mistake can go unnoticed for years and cost hundreds of thousands of dollars, choosing the best sales tax partner is critical. To help identify these resources, we’ve curated a list of the top 11 sales tax service providers ready to support your business's success in 2024.
Not only do they offer expertise on current standards and regulations but also up-to-date technological capabilities so there are no surprises when it comes to efficiency or compliance. Read on for our comprehensive evaluation of each provider guaranteed to put you one step closer to taking sales tax management off your plate for good.
What do Sales Tax Service Providers Do?
A good sales tax service provider handles virtually everything related to sales tax compliance and management. They become an invaluable asset that lifts the sales tax burden off your shoulders.
The most important services sales tax providers should offer include:
- Filing Returns and Remitting Payments. This core function involves preparing, filing, and paying your sales tax returns in every required jurisdiction by each filing due date. Reputable sales tax service providers guarantee accurate, on-time filing. But that’s just the tip of the iceberg when it comes to sales tax.
- Preparing Transaction Data for Filings. Most businesses will have transaction data in multiple e-commerce, accounting, or ERP systems that will need to be aggregated for sales tax purposes. If done manually, this could take many hours per month.
- Managing Audits. Sales tax service providers act as your audit defense team from start to finish. Their expertise protects you from penalties, fines, and other costly errors if you were to handle an audit yourself. Last year, providers managed an average of 715 notices per client.
- Monitoring Law Changes. Sales tax service providers vigilantly track relevant sales and tax law changes across jurisdictions. They then proactively implement required updates to your business. This prevents non-compliance issues before they happen.
- Cleaning Up Back Taxes. Sales tax service providers can re-file past returns, negotiate tax relief programs, and resolve outstanding liabilities from previous non-compliance. This removes a huge burden.
- Being Your Trusted Advisor. Having a team that you can turn to for advice is invaluable, especially when they understand your business’s unique history and setup.
Additional services sales tax providers may offer include:
- Nexus Studies and Sales Tax Exposure Estimates. These are to determine where your business owes sales tax, and what your overall sales tax risk is in that jurisdiction.
- Notice and Mail Management. This may sound trivial, but if sales tax notices aren’t responded to promptly, it can result in substantial penalties. Last year, we received an average of 715 state notices and emails for each of our clients.
- Product Taxability Analysis. Providers can advise on whether products or services may qualify for tax exemptions, or if it is worth bringing in an attorney for a definitive “Product Taxability Study.”
- Sales Tax Setting Setup. Sales tax service providers can set up and test your e-commerce, accounting, and ERP systems to accurately calculate and collect sales tax based on the products you sell.
- Sales Tax Permits. Sales tax service providers can help you determine what permit is required, and then help open or close them in new jurisdictions.
- Monitoring Sales Tax Variances. Sales Tax Variance is the difference between how much sales tax you collected versus how much you should have collected. Sales tax service providers should monitor this to ensure your systems continue to work correctly.
- Exemption Certificate Management. This can include collecting, organizing, storing, and managing customer tax exemption certificates to validate non-taxed transactions.
- Sales Tax Refund Management. Submitting and tracking refund claims when overpaid tax is identified.
- Coordinating with Your CPA for Multi-State Income Tax. Most businesses that owe sales tax in multiple states will also owe income tax in multiple states. Your sales tax service provider should be able to coordinate with your CPA to provide a breakdown of what your sales are by state to assist with this process.
Sales Tax Service Provider vs. Sales Tax Software: What’s Better for Your Business?
Deciding between sales tax software and a full-service provider comes down to understanding your business's specific needs and situation. Both options aim to simplify sales tax compliance but have key differences that make one or the other a better fit depending on your circumstances.
Consider Sales Tax Software If…
Sales tax software is best suited for businesses with straightforward sales tax needs and some expertise in handling tax compliance in-house. Specific situations where tax software could be a good fit include:
- Your business has a very simple setup, such as selling general merchandise online through just one sales channel. Complex multi-channel and mixed product/service businesses are better suited for a provider.
- You have a smaller sales volume, such as under $1M per year. Once you reach higher volumes, a provider becomes more cost-effective.
- You have in-house expertise in multi-state tax requirements and are comfortable managing the entire sales tax workflow internally. Without tax expertise, a provider is recommended.
Consider a Sales Tax Service Provider If…
For more complex business models or a high desire to outsource sales tax, a full-service provider is likely the better choice. Specific situations where a provider would be recommended:
- You sell diverse product types across multiple sales channels, like online, retail, wholesale, etc. More complexity warrants a provider.
- You want to outsource sales tax management rather than handle it internally. Providers offer full tax compliance support.
- You desire the highest level of compliance assurance and support in case of an audit. Providers offer more audit protection.
The key is aligning your resources, needs, and risk tolerance with the solution that makes the most sense. Evaluate both options to determine the optimal approach for your business.
The 11 Best Sales Tax Services by Industry
Navigating the complex world of sales tax can be a daunting task for businesses. With the right sales tax service, however, managing these responsibilities can become significantly easier. This guide outlines the best sales tax services in 2024, each uniquely tailored to suit different needs and industries.
Grant Thornton is the Best Sales Tax Service for Large Enterprises
Grant Thornton has established itself as a premier sales tax service for large enterprises, offering a blend of comprehensive expertise and advanced technological solutions. Their ability to handle complex tax structures and provide strategic planning makes them a top choice for large-scale businesses seeking robust and reliable sales tax management.
TaxValet is the Best Sales Tax Service for Small and Mid-Sized Businesses
TaxValet’s sales tax service completely takes sales tax off your plate so that you’ll never have to deal with it again. TaxValet’s comprehensive service takes the hassle, stress, and risk out of sales tax by handling everything for you from start to finish. TaxValet’s service includes everything you need for one simple all-inclusive price.
TaxValet offers a team of trusted advisors that provide a done-for-you setup, stay on top of tax law changes, manage sales tax audits for you, proactively monitor sales tax nexus changes, and more. Additionally, TaxValet’s SMB clients enjoy automated sales tax filings and payments with hands-free data connections for all of their sales channels, an audit and penalty guarantee, plus industry-leading customer support.
Sales Tax DataLINK is the Best Sales Tax Service for Manufacturers
Sales Tax DataLINK is the only comprehensive sales tax solution in the marketplace that specifically addresses the needs of manufacturers. They are unique in that they provide sales tax software, as well as offer consulting, advisory, and professional services. Finding a sales tax solution that will work for your manufacturing business can be particularly challenging because of the additional compliance requirements manufacturers face. As a manufacturer, you’ll need a solution that can support manufacturing exemptions, focusing on remitting use tax for certain purchases.
Miles Consulting Group is the Best Sales Tax Service for Construction Contractors
Miles Consulting Group shines as a top sales tax service for construction contractors, providing comprehensive solutions for multi-state tax challenges. Their expertise extends across various business sizes and industries, with a notable emphasis on construction, where they adeptly navigate complex tax landscapes.
Merit Advisors is the Best Sales Tax Service for the Oil and Gas Industry
Merit Advisors has established itself as the premier choice for sales tax services in the oil and gas, and energy extraction industries. The team at Merit is built on decades of experience and insight throughout the entire energy value chain. Their sales tax advisory services focus on all aspects of the oil and gas value chain including exploration and production, oilfield services, midstream, royalties & minerals, chemicals & refineries, real estate, and renewables.
Cherry Bekaert is the Best Sales Tax Service for Marketplace Facilitators
Cherry Bekaert excels in delivering tailored sales tax services to marketplace facilitators with complex tax needs. Marketplace facilitators operate online platforms that connect buyers and third-party sellers. Examples include websites like Amazon, eBay, and Etsy. Unlike marketplace sellers, facilitators take on significant sales tax obligations and compliance challenges associated with managing transactions across seller networks. Cherry Bekaert’s focus on personalized solutions, combined with a deep understanding of the unique challenges faced by this segment, positions them as a go-to provider for businesses seeking specialized sales tax guidance and support.
TaxValet is the Best Sales Tax Service for Ecommerce
TaxValet provides an affordable all-inclusive solution with deep ecommerce sales tax industry expertise. Their team of trusted advisors provides a done-for-you setup, stays on top of tax law changes, manages sales tax audits, proactively monitors sales tax nexus changes, and more. Additionally, ecommerce clients enjoy automated sales tax filings and payments with hands-free data connections across all of their sales channels. Plus, it’s all done for one simple monthly fee which includes an audit and penalty guarantee, and industry-leading customer support.
TaxConnex is the Best Sales Tax Service for the Telecommunications Industry
TaxConnex offers specialized sales tax services tailored for the telecommunications and VoIP industry. Their expertise in this sector's unique tax issues, along with their commitment to staying abreast of regulatory changes, makes them an invaluable asset for telecom businesses. They offer services for each aspect of the sales tax process from nexus determination to audit defense and sales tax filings.
Sales Tax Institute is the Best Sales Tax Service for Sales Tax Training and Education
The Sales Tax Institute is a highly sought-after provider of sales and use tax training for accounting and finance professionals and business owners. They host live seminars, webinars, and online courses regarding basic, intermediate, and advanced sales and use tax concepts across a variety of industries and topics. If you have an accountant on staff who is looking to improve their knowledge and experience of sales tax through expert training, then The Sales Tax Institute is right for you.
Sales Tax and More is the Best Sales Tax Service for Exemption Certificate Management
Sales Tax and More is a boutique sales tax consulting company that specializes in exemption certificate validation. If you are looking for assistance with collecting, storing, and validating sales tax exemption certificates, then Sales Tax and More could be right for you. They also specialize in sales tax research and consulting, return preparation, sales tax permit registrations, sales tax audit defense, and voluntary disclosure agreements.
TaxOps is the Best Sales Tax Service for Multi-Tax Voluntary Disclosure Agreements
TaxOps excels at providing voluntary disclosure agreement (VDA) services for multiple tax types including sales tax and income tax. If your business operates in multiple states and is past due on paying both income and sales tax, then you must work with a sales tax consultant who can manage VDAs for both tax types to take full advantage of their benefits. TaxOps is primarily composed of sales tax attorneys and seasoned sales tax professionals.
6 Questions to Ask Before Selecting a Sales Tax Service
Here are 6 key questions businesses should ask when selecting a sales tax service provider:
- How do you determine pricing?
Seek flat-fee pricing with unlimited support to avoid surprises. Beware of providers who nickel and dime for every service. Ask for cost examples based on your sales volume.
- Can you provide client references?
Reputable providers should connect you with current clients for candid feedback. Speaking with references is invaluable for gauging customer satisfaction.
- How will you handle audits?
Make sure the provider offers full audit support and representation at no extra cost. Audits are inevitable, so you need a provider who can expertly manage them on your behalf.
- What is your experience in my specific industry?
You want a provider with expertise in your vertical to understand your business model and any niche issues. Having relevant experience ensures more tailored and strategic advice.
- How do you stay current on changing tax laws?
The provider should proactively monitor legal changes and update your business accordingly. This prevents non-compliance and ensures you don't miss key state tax law changes.
- What technology and tools do you use?
Look for automated solutions that integrate with your ecommerce platform for efficiency. Modern tools also allow for better data access and transparency.
Multi-state sales tax can be complicated and time-consuming to manage. Accurately calculating and collecting taxes on purchases, determining nexus across states, and staying up-to-date with legislative changes can take up valuable resources that are better spent on other aspects of your business. However, with an experienced sales tax service partner by your side, you can take away the burden of manually handling those tasks, ensuring compliance while freeing up precious hours in your work day. Choosing the best sales tax service for your unique business is the first step.
At TaxValet, we offer clients 360-degree sales tax compliance services. From determining nexus, managing DOR notices, and filing paperwork to timely payments, audit protection, and keeping up with legislative changes – we take sales tax compliance off your plate for good. If you’re ready to work with experts who understand your needs and can keep your company compliant at all times, schedule a free sales tax review with our team and see the difference for yourself.