Nex$Tax: AccountMate/SQL Integrated Sales Tax Solution

Nationwide US sales tax nexus tracking, with correct rates and reporting

Price: $250/monthly automated payment
Compatible with: AccountMate SQL and SQL/Express V10.4 and above (can be ported to a prior version for additional fee)

The problem…

Tracking applicable sales tax rates has always been a hassle for states that your business has physical nexus in. But since The Wayfair Decision in June 2018, more than 40 states have passed legislation setting their own criteria for “economic nexus” and it’s been REALLY tough…

Each state has their own ever-changing definition of “economic nexus” with their own ever-changing sales tax rates—and the ever-changing rates of more than 10,000 counties, cities, parishes and other taxing bodies within them…

Then the same item may be taxable in one state, but not another…

Now layer on top that some states are origin-based (sales tax rate based on where you’re shipping the product “from”) while others are destination-based (sales tax rate based on the address of your customer). California, of course, is always different so they’re a mix of origin and destination.  Meaning, naturally, whichever one is higher is what applies in The Golden State…

So, all you have to do is keep up with economic nexus of more than 10,000 jurisdictions and their rates, know what items those apply to, then report and file and remit in the numerous formats, and monitor states that you might be meeting economic nexus in. No sweat, right?!

Combined Sales Tax by Jurisdiction Arkansas, April, 2018

Determining correct sales tax rates is arduous, to say the least! To get a closer look at this example, go to the State of Arkansas web page to download a large PDF of the map.

Not the solution: ZIP codes…

Once upon a time, when jurisdictions were far fewer, companies would make “reasonable guesses” of the applicable sales tax based on the ZIP code of the customer. This was a poor decision then and is completely untenable now as ZIP codes were designed for efficient mail deliver routes—not tax jurisdictions—and thus there are numerous ZIP codes which cross city, county, and even state boundaries, let alone defining other tax jurisdictions.

Also not the solution: Create thousands of tax codes…

The AccountMate software allows the definition of sales tax entities (jurisdictions), which are then combined into sales tax codes for the applicable “overlapping jurisdictions.” Yes, you could create and maintain all of these manually and call every customer to get their applicable tax jurisdiction before entering a Sales Order. But that would be a MONSTER effort, and still you’d have to be monitoring changes in rates in all tax jurisdictions, keeping an eye on achieving “economic nexus” and doing all your sales tax reporting and filing with the applicable states.

There’s a product available for AccountMate/SQL which attempts to automate the creation of all the sales tax codes in your system, but you still have to manually assign to each customer/bill-to/ship-to address—based loosely on ZIP codes. It also requires monthly updating and doesn’t address monitoring economic nexus or help with your sales tax reporting and filing, so it’s far from a complete solution.

The solution: Nex$Tax

Accurate customer information: An often overlooked component of sales tax collection and reporting is the accuracy of your customer addresses, including bill-to and ship-to addresses. So, besides being the only product to integrate AccountMate/SQL to an online sales tax service, Nex$Tax is also the only product to provide USPS validation of your customer addresses so we have “rooftop accuracy” of your customer locations. And, of course Nex$Tax also provides the ability to designate customers as tax-exempt (and track certificates) or as a foreign address.

Accurate item information:  There are dozens of “tax classifications” applicable to items, which can have different tax implications in different jurisdictions. The classic example being, “Is a Twinkie® candy or food?” The answer is, “it depends on the tax jurisdiction,” so a component of Nex$Tax is the proper classification of your items—which is usually easy as most AccountMate clients sell a very narrow range of products and services so this is a mass update to your database.

Calculating sales tax: When entering an AccountMate Sales Order or Customer Invoice the applicable sales tax rate is queried from the online TaxJar service—including if freight/shipping is taxable—and then applied to the transaction. In the case of entering a Sales Order, when subsequent shipments are made the sales tax rate is re-queried and updated if there’s been a change—as it’s the sales tax rate “applicable at time of shipment” which states require be collected and remitted.

Reporting and remitting sales tax: All customer transactions are automatically uploaded to TaxJar at the end of the day, then all reporting and tax filing/remittance is done via the TaxJar online portal. The TaxJar service also tracks your ongoing sales volume, in dollars and number of transactions for determining if/when you’ve met nexus with additional states. Then, when you do, you merely “turn on” the state in TaxJar and Nex$Tax automatically begins collection of sales tax with no additional changes in your AccountMate system.

Website integration: If you also have an e-Commerce website for online sales, we’re happy to chat about integrating to that as well—since the sales tax is often calculated at time of order entry on your website and this needs to be consistent there. Please note that for Magento-based e-Commerce sites we already have this integration done!

What does it cost?

TaxJar subscription:  Pricing for TaxJar is based on the number of the transactions and number of filings. A transaction is a query to get the applicable sales tax rate—such as entry or edit of a Sales Order or shipment of an order, so a good estimate is your number of sales orders multiplied by three—and transaction pricing is here. Filing fees are currently $25 per state per filing but some states will require monthly filing while others may be quarterly.  Sign up for your TaxJar account here.

Nex$Tax subscription: Simple math on this part! Pricing for Nex$Tax is $250/month, regardless of the number of transactions, or states you have nexus in, or the number of companies using it within your AccountMate installation. The form for the monthly automatic payment is here.  Please note Nex$Tax is available for AccountMate/SQL V10.4 and up, but may be ported to prior versions for the cost of the reverse-integration effort—please contact us for details.

AccountMate source code: Source code for your Accounts Receivable and Sales Order modules are required for integration of Nex$Tax. Please contact us, or your registered AccountMate Business Partner, for details.

Modification integration: If you have existing modifications to your AccountMate Accounts Receivable and/or Sales Order modules, then Nex$Tax will need to be integrated with those modifications. Again, please contact us for details.

Note: Nex$Tax functionality is currently not available in the RMA module.