The ASCII Group Rises to Sales Tax Challenge
Death and taxes may always be with us, but processes associated with that latter appear to a lot more complex for the average solution provider than they need to be.
Death and taxes may always be with us, but processes associated with that latter appear to a lot more complex for the average solution provider than they need to be. To help solution providers better navigate sales tax requirements in different states, The ASCII Group, an industry association made up of resellers and IT service providers, has launched a new service to keep solution providers up to date on the amount of sales tax they should be charging across all 50 states.
As more solution providers conduct business across multiple states, this tool should be a godsend: Not only does each state have a different sales tax rate but many of them don’t make it particularly easy for solution providers to find out what they should be charging, said Jerry Koutavas, president of The ASCII Group. As a result, solution providers are either collecting too much sales tax or, worse yet, setting themselves up for an unpleasant audit by collecting too little.
The tool is available at no additional cost to its members. Koutavas noted The ASCII Group contracted with a firm that specializes in tracking sales tax changes to create the database, which members can consult to determine sales tax rates in different states. Anytime a state government makes a change to its sales tax laws, the databases will be updated with that new information, said Koutavas.
While state tax law has always been a vexing issue for any business, in the age of the cloud it’s become even more complicated for solution providers. E-commerce has made it simpler for organizations to acquire IT equipment and software from almost anywhere. At the same time, managed IT services delivered via the cloud means that solution providers no longer are limited by geographical region. A managed service provider (MSP) now can use the cloud to compete in any state they want.
However, the database service doesn’t track sales tax laws in Canada—or any other country, for that matter. But clearly, expanding operations internationally is the next big thing for many U.S.-based solution providers—not necessarily because they want to, but rather because a much larger number of their customers are doing business around the globe and those customers want their local solution provider to be able to support them anywhere they operate.
In the meantime, solution providers can at least take some comfort in the fact that while sales tax may be lower or higher in one state vs. another, at least they won’t be guessing as to what amount they should actually be paying.