Pitney Bowes Software Unveils Top Business Tips for Managing Geolocational Tax Requirements
March 15 2012 - 9:10AM
Business Wire
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many U.S. businesses discover that inaccurate or outdated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. A company’s capability to track
their mobile assets closely can save significant time and
money.
- Undertake a detailed assessment of
the location where an employee is working at all times - It is
crucial to establish where employees work and live in order to
apply the correct tax withholdings. Some states like Ohio and
Pennsylvania have highly complex rules for payroll tax based on
where people are living and working. If an employee splits their
time between multiple office locations, even within the same state,
this can have a dramatic impact on the rate they must pay.
- Calculate all of the above on at
least a quarterly basis - Don’t wait until you are in the same
quarter as tax deadline day to start scrambling to organize the
accounts and check geolocational data. Make this a regular habit
and, at a minimum, carry out a thorough inventory on a quarterly
basis.
“Proactive management of geolocational tax issues is an
excellent best practice that can immediately deliver cash to a
business’ bottom line,” said John O’Hara, President, Pitney Bowes
Software. “Businesses are often audited and CEOs should have the
reassurance that their firm is using the most up-to-date data to
determine the outcome.”
For more information on various different geolocational tax
boundaries and rates businesses can visit Pitney Bowes Software’s
GeoTAX website. Please visit:
http://www.pbinsight.com/products/location-intelligence/applications/business-applications/geotax-enterprise-tax-management/
About Pitney Bowes Software
Pitney Bowes Software provides multichannel solutions that
leverage data to create relevant dialogue between organizations and
their customers. These solutions enable lifetime customer
relationships by integrating data management, location
intelligence, sophisticated predictive analytics, rules-based
decision making and cross-channel customer interaction management
to increase the value of every customer communication while also
delivering operational efficiencies.
Pitney Bowes Software is a wholly-owned subsidiary of Pitney
Bowes Inc. (NYSE:PBI), a customer communications management
technology leader. For more information, please visit
http://www.pbinsight.com/products/location-intelligence/applications/business-applications/geotax-enterprise-tax-management/
and www.pb.com.
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