State and local jurisdictions constantly change tax rates.

Protection against audits, obsolete data and changing tax laws is a necessity. The requirements of Sarbanes-Oxley have increased the importance of not only staying current with applicable laws, but also storing and maintaining specific records for future reference. As state and local jurisdictions constantly change tax rates, the task of tracking applicable sales and use taxes is clearly a job for a computer-based solution.

A quick perusal of the software applications reviewed here reveal there are multiple ways for a company to arrive at the correct tax solution. As with many other applications, the challenge is selecting the best fit for your company, its products and the way it does business.

The key consideration in that selection is a company's size and its geographic presence. A small company with few products and a local sales reach most likely will find one of the manual lookup applications a good fit. As the size of the company grows and its product list expands, a manual process may prove too cumbersome to maintain. In addition, if a company has multiple business or shipping locations, an integrated method of maintaining correct tax application may quickly become imperative, regardless of its size. When that point arrives, new considerations present themselves:

A. Which application will integrate efficiently with existing financial and accounting applications?

B. If there are several options for "A," above, which application will fit best with existing company practices?

C. Which application will be best at producing and maintaining reports the company routinely needs or are required for regulatory purposes?

D. Finally, as more companies begin conducting business globally, a key consideration is which application will deal effectively with international taxes.

The good news is that, regardless of company size, business type and location, there are a number of effective applications that offer efficient sales and use tax solutions.

By Glenn Gordon

BNA Simplifies Staying Current with Tax and Form Changes

Established in 1983, BNA Software specializes in publishing tax software applications for professionals. BNA Sales & Use Tax Rates and Forms installed with the optional Rates File Generator spans tasks from application for tax identifier through compliance. With monthly CD updates and weekly downloadable rate updates, the application provides sales and use tax rate information for every U.S. taxing jurisdiction. In July the company will be announcing availability of the web-based version, which has all the features of the CD version.

Features

The application runs on Microsoft Windows 95, 98, Me, NT, 2000, XP or higher. Install the CD-ROM as Forms only, Rates only or the optional Rates and Rates File Generator. Monthly updates also are in CD-ROM format for easy access, with a convenient "What's New" section clarifying changes from the previous release. Obtain more frequent updates online as needed.

The document workspace is familiar to Windows users and easy to navigate. An iconic tool bar at the top provides access to the most frequently used functions, such as opening documents, saving and printing, drop-down menus and hot keys. Open multiple forms at any time, with open forms indicated by tabs down the left side of the workspace.

Color designates form field types--aqua for fill-in fields, green for calculating fields and red for validation fields requiring data entry in specific formats. A pop-up note displays the correct entry format when there is a question. To keep track of where you are, the active field is outlined in yellow. Insert additional fields for notations or other information when necessary. Override calculations on a field, page or form basis and restore them quickly in the same manner.

You can customize the appearance of most forms to some degree. For example, if the aqua becomes overwhelming, as it did for me, you can change the default-field color scheme to suit your tastes.

The use of profiles, where information about client and preparer is stored, simplifies data entry. Applying a profile automatically transfers its information to the corresponding fields on the form. Incorporate profile changes simply by re-applying it to a form.

Search by ZIP, city, county or state in the Tax Rate Lookup section. Rate details appear in a chart format by Sales, Use and Location along with effective dates and previous rates. Clicking a button opens a window to calculate specific tax amounts. For quick reference, add frequently used jurisdictions to a favorites list. Export Sales and Use Tax Rates for one or more states quickly in a comma separated variable (CSV) text file.

The application supports special tax rate treatments such as combined/split rates, overriding rates and maximum tax levels, as well as special districts including transit, school, water and police.

The optional Rates File Generator allows quick and easy importing of rates into other applications by creating an ASCII file recognizable by virtually all tax-related programs. Data from previous years such as client data and profiles can be imported to eliminate time-consuming data entry.

All of the nearly 2,000 forms in the program are government-approved for filing, including forms for business registration, exemption certificates, powers of attorney and sales and use tax.

Support

Free, unlimited toll-free telephone technical support is available from Monday through Friday, 9 A.M. to 7 P.M. Eastern time. The company Web site provides interim maintenance releases and FAQs.

Summary

BNA Sales & Tax Use Rates and Forms is a package of flexible, easy-to-use tools that simplifies the task of staying current with tax and form changes.

BNA Software

www.bnasoftware.com

800-424-2938

By Glenn Gordon

Choose the ZIP sales Lookup Version You Need

As long as you have Microsoft Windows 98 or higher, you can put to work ZIPsales[TM] Lookup from CCH Tax & Accounting. CCH offers the ZIPsales Lookup product two ways: From CD-ROM, the application reviewed here, which installs on personal computers or networks, or the online version, which has somewhat less capability.

Several versions are available, including those specific to health maintenance markets and restaurants. Regardless of the version, the installation procedure is the same.

Install the basic ZIPsales Lookup application and ZIPProduct Manager application from the CD. During installation, select the states for which you desire data. You can purchase a single state version or blocks of either five or 10 states, eliminating the purchase of unnecessary data.

Features

Access the CCH database through the ZIPProduct Manager to download the information to which you subscribe. Keep information current by downloading monthly updates the same way.

As a separate product, the ZIPsalesDatabase can be imported into existing applications and systems not requiring the use of the ZIPsales Lookup application. As an add-on to the ZIPsalesDatabase is ZIP + 4, allowing access to more specific tax information.

The ZIPsales Lookup screen features a U.S. map with each state color-coded as to taxing level imposed, such as state or state and county. Icons for such functions as ZIP codes and lookup locations lead to six drop-down menus. I expected to click on the map to access information but found it is for display purposes only. The icons and drop-down menus are the pathway to all data.

As expected, you retrieve sales and use tax by city, county, state or ZIP. A handy lookup box triggered by the Lookup Locations icon opens to accept retrieval parameters. After entering a parameter, click on an arrow to bring up a list in which the closest match is at the top. Alternatively, after entering a parameter, clicking OK produces a list of all cities meeting that parameter and sorted appropriately.

Clicking the ZIP icon brings up a list of all ZIP codes, all of which can be re-sorted by city, county or state. Or enter a specific ZIP code in the Key field. Each keystroke re-sorts the list, and clicking OK returns the complete sales and use tax rates.

The displayed tax rate information includes city and county filing codes, city and county split rates, special districts and effective date for the rate for each taxing entity. Display prior tax rates and effective dates by clicking the Previous button. To display tax amounts, enter a dollar figure in the Amount box and click Calculate.

Click the New Tax Rate icon to access the List of Changes box providing tax change information dating back to January 1994. Selecting the state, level of detail, effective date and output method delivers what can be a hefty list of tax change information.

Files with tax rate information for custom locations can be imported in ZIPsales Lookup through a simple procedure allowing appropriate fields to be specified according to the import file.

You can print a full tax rate directory in book form from the main menu; select either all or specific states, and sort according to preference.

Support

CCH Tax & Accounting offers a variety of training and consulting services, including installation and training of the ZIPsales Lookup utility. ZIPsales Lookup includes a comprehensive, well-indexed help section. In addition, my experience proved that courteous, helpful telephone technical support is readily available to solve--as in my case--any update access problem. Support by e-mail and fax also are available.

Summary

ZIPsales Lookup is simple to use, and it is effective at maintaining current sales tax and use information along with extensive tax history.

CCH Tax and Accounting

www.tax.cchgroup.com

800-525-3335

By Glenn Gordon

Taxware Rewards Complex Setup with Ease of Use

Taxware, a developer of tax calculation and compliance systems, offers Taxware Sales and Use Tax Solution, a tax calculation and reporting application that automatically calculates taxes for sales, purchases and rentals.

Taxware did not intend for this application to serve as a manual lookup of sales and use tax information, although that function is available through a separate application. Rather, the company designed it to integrate seamlessly with existing software such as SAP, Oracle or other business accounting or finance applications. After setup, the program performs all calculations automatically and passes them to the business application for presentation as needed, in either a transaction document or graphic display.

Features

After installation, setup is accomplished through a graphical user interface called the Sales/Use Tax System Toolkit. Following system setup of items such as file locations, the Nexpro items are configured. Nexpro establishes all the tax parameters that must pass from the company billing system.

First, enter the company profile along with the ship from and point of order information. This step allows a company to establish multiple or separate business location profiles, even if each location has its own individual taxing requirements. Next, enter the nexus description for each state. This allows proper tax calculation for each state, city and county. For example, for a particular state, you can select not to tax at all, to tax all, or to tax all but exclude locally administered cities and counties. Then for each state, as necessary, specify counties and cities to be included or not. Also apply product code categories to each product. For example, assigning a fruit juice product code is key to applying taxability rules based on the percentage of fruit it contains. This involves applying any of the 2,000 pre-defined classifications of products or services to the products. If necessary, the user can create custom codes unique to that business and add them to the taxability matrix.

The STEP system portion of the System Toolkit allows for Sales Tax Exemption Processing. This feature customizes maintenance of tax exemption records by storing and tracking exemption certificates for future use. It even identifies certificates nearing expiration and flags them in advance of the expiration date.

At first glance, all the setup can seem challenging, but once it's complete the application automates the entire process thereafter.

A taxability matrix contains a database of rules for thousands of situations, including full and partial exemptions, special rates, caps and thresholds. Taxability information updates are made at least monthly. The user can download the update files from the Taxware Web site at any time. The VeraZIP function ensures precise taxing jurisdiction assignment by identifying multiple ZIP codes within counties and/or cities and outside city limit conditions as well.

As noted, complete system installation allows all tax and product code information to pass automatically to the company finance software. For integration with special or unique business financial software, a Universal Tax Link function allows you to write an API to create the bridge between the applications. A large number of reports are available at any time, including the Audit file, important for compliance with the requirements of Sarbanes-Oxley.

Summary

The Taxware Sales and Use Tax Solution is an industrial-strength answer to the question of how to accurately apply the correct sales and use taxes to company sales. The effort required to set up tax jurisdiction and product definitions is more than rewarded by the ease with which the tax information is applied to the rest of the business practices.

Taxware

www.taxware.com

877-TAXWARE

By Glenn Gordon