Article
Sales and use tax compliance: The top three challenges and key tax planning strategies
July 21, 2021 · Updated May 13, 2025 · Authored by Mo Huda, Mark Woodward
Sales and use taxes can be some of the most complicated tax obligations many companies face.
To correctly collect and remit the tax in each reporting period, companies must apply detailed transaction-by-transaction analysis. The complexity of this approach, coupled with the ever-changing sales and use tax environment, can make it challenging for even the most sophisticated companies to stay fully compliant.
That said, it’s important to get this process right the first time — incorrect reporting can expose companies to hefty penalties and administrative burdens.
Below, gain insight into the three most critical sales tax compliance challenges many companies face as well as key steps to plan for them with confidence:
- What is sales and use tax compliance?
- What are some of the common risks with sales and use tax compliance?
- Why is accurate sales and use tax compliance such a challenge?
- How can you stay up to date with the forms, deadlines, and filing requirements?
- What internal processes can help you remain compliant?
- Can your company outsource sales and use tax reporting?
What is sales and use tax compliance?
Sales and use tax compliance refers to correctly reporting transactions and paying taxes to each state or local jurisdiction as required. Jurisdictions can include cities, counties, districts, and parishes. To stay compliant, your company must:
The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely. The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.