Using a zip code based tool to determine a sales tax rate may work, but then again it may not. Take for example a recent announcement by the Ohio Department of Taxation providing an updated list of sales tax rates by Ohio post offices and zip codes, effective April 1, 2014.Relying on these zip codes alone could lead to over- and undercharging sales tax.
Why is that? It turns out this list includes the caveat that: “Some Ohio municipalities do not appear on this listing because they are not large enough to have their own post offices.” In addition, some Ohio municipalities include more than one jurisdiction. For example, “Small portions of Delaware, Fairfield, Licking and Union counties asses a transit authority sales tax that may not be accurately reflected in the rates by post office.”
Charging the wrong sales tax rate could lead to more than just a customer service issue. Sales tax compliance is like the game of Operation: if you’re not very precise, you can set off alarms. Watch the video below to learn more on why relying on a manual zip code based system to calculate sales tax may not be the wisest option:
Want to learn more about quick ways to lower your audit exposure? To obtain your official white page on this topic or for a free demo, contact Dena at 860-399-4215 x.202 or dpoblete@cmsct.com.
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