Avalara, a leading provider of cloud-based tax compliance automation for businesses of all sizes, announced the availability of Avalara Vendor Exemption Management, a new product that helps businesses eliminate the hassle of creating, sending, and tracking sales tax exemption documents at the time of purchase. This product helps businesses streamline compliance requirements by automating the vendor exemption process, centralizing exemption certificate storage, and reducing supply chain interruptions.
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“Businesses can improve compliance and minimize order delays on tax-exempt transactions by automating exemption certificate management across transactions while also saving time spent on manually creating and providing documentation to vendors.”
Managing exemption certificates poses challenges to tax-exempt organizations
Certain entities are often exempt from paying sales tax on their purchases of taxable goods, like government agencies, buyers purchasing goods to resell, and manufacturers that incorporate purchases into larger merchandise items. Even though such entities are relieved from paying sales tax, in most states, they’re required to submit a valid exemption certificate to the vendor they’re purchasing from. To avoid tax and audit liability, and to reduce the risk of orders being delayed, tax-exempt businesses must provide valid exemption documentation before or at the time of purchase. But, for many businesses, the process of providing documentation is a manual, time-consuming, and error-prone process.
Improve exemption certificate management with Avalara
Avalara Vendor Exemption Management helps organizations that claim sales tax exemption automate the process of creating, providing, and recording sales tax exemption documents. This enables businesses to:
- Manage sales and use tax compliance on purchases. Avoid rejected documentation by gaining control over the approval process for issued certificates.
- Improve efficiency of exemption certificate management. Eliminate the need for many manual processes by automating the process of finding, verifying, storing, tracking, and understanding the requirements for exemption certificates on tax-exempt purchases.
- Mitigate supply chain impact. Provide exemption certificates before or at the time of purchase to reduce purchase order processing costs, rebilling requests, and order delays.
- Remove compliance risk for vendors. Minimize the risk of audit for vendors by providing them with streamlined, more accurate exemption documentation.
- Reduce audit and improve record retention risk. Leverage centralized storage for vendor exemption certificates across the business for improved reporting and analysis.
“In our digital-first society, tax-exempt buyers must be able to manage their exemption documentation in near-real-time to mitigate compliance risk and prevent transaction delays,” said Kevin Permenter, research manager at IDC. “Tools that automate exemption certificate management provide tax-exempt businesses with increased efficiency throughout the supply chain and reduce the risk of noncompliance.”
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