Using SAP to Manage U.S. Sales Tax from Overseas
Key Takeaways
⇨ Many overseas organizations operating in the U.S. struggle with its complex tax calculation system.
⇨ Organizations operating in the U.S. must consider the type of product and customer, as well as the states, sales channel, location, and exemption when calculating sales tax.
⇨ Relying on an external software solution can help bolster SAP tax calculation capabilities.
Many organizations from outside the U.S. struggle to do business within the country, due in large part to its complex and often confusing sales tax system. Unlike VAT or GST, sales tax is only levied on the final transaction with the customer, and there are no charging or reporting requirements for the companies in the supply chain. Further, each state has its own compliance regime, adding difficulty to the workload of tax teams. This challenge is heightened by the increasing scrutiny on reporting by state tax authorities looking for additional revenues.
In this article, we will explore some of the intricacies of U.S. sales tax that organizations should know. We will also review tips and tools SAP organizations can use to ensure that they are compliant with all local and national taxes when doing business within the U.S.
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