For decades retailers have held onto the sales taxes they collect from consumers for weeks before sending those funds to state revenue agencies.
States are becoming increasingly impatient with this process. Some are pushing for accelerated collection schedules and a few are even talking about real-time sales tax compliance strategies.
Massachusetts Gov. Charlie Baker (R) has long highlighted accelerated compliance as a way to realize revenue faster and reduce opportunities for tax evasion. On April 1 the Bay State launched an advance payment tax program that shortens the remittance period. Longer term, Baker is recommending a requirement that third-party payment processors convey sales tax to the state on a daily basis, beginning in 2024.
On this week’s episode of our podcast, Talking Tax, reporter Michael Bologna talks with Liz Armbruester, senior vice president for global compliance at tax software company Avalara, and Patrick Reynolds, senior tax counsel for the Council on State Taxation.Armbruester talks about why she believes that “all signs point to a future where payments will be defined by near-real-time tax compliance,” while Reynolds highlights the business community’s concerns about the costs and burdens associated with these compliance strategies.
Listen to the episode here.
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