Software That Aids in State Sales and Use Tax Filings Using Microsoft Dynamics Becomes Increasingly Popular

Stulz ATS has grown quickly in the United States. But until just a few years ago, it faced an unexpected obstacle to growth: using its Microsoft Dynamics GP system to keep tabs of state sales and use taxes in the 16 states where the maker of air conditioning and de-humidifying systems operates.

It had 500 to 600 invoices each month, and needed to manually process the state and use tax component. Its financial and accounting people would manually research tax rates and regulations week to week, costing the company 500 to 600 person days each month.

Since it installed special software that works with Dynamics GP, it has automated the tax function, and eliminated the manual entry, and the hundreds of thousands in expenses associated with it. Moreover, the new system is scalable to all 50 states, enabling Stulz to continue its growth without concerns about managing the sales and use taxes that come with each new state it expands into.

Stulz selected the Sabrix Managed Tax Service, which held a webinar last week to demonstrate its system. It's one of a growing number of such systems to automate the ever-more-complex sales and use tax functions of growing small and mid-size companies.

Sabrix recently surveyed 500 small and mid-size companies and found the cost of compliance with state sales and use taxes averages more than $130,000 annually. Moreover, 90% of the companies are audited at least once each year, and 55% received five or more audits.

Part of the challenge, according to Sabrix, is that there were 1,400 state tax changes in 2007, and nearly 700 so far in 2008. As one example of the complexity, said a Sabrix official during last week's webinar, "In California, software sold over ...