I recently polled several tax managers of large corporations that engage in a multi-state business and asked them whether their companies could stay in reasonable compliance with state and local tax law without using the computer. All said that it would be impossible to meet the compliance requirements of the states and localities without heavy dependence on computers. This reliance on the computer is not surprising given the amount of data that firms must reference to keep up with the thousands of taxing jurisdictions throughout the United States. The many different types of taxes that governmental bodies impose further complicate the situation.
How does the computer help? The computer provides auto-mated processing of routine transactions, such as calculating employee payroll withholding taxes, calculating sales taxes on orders,calculating corporate income taxes, summarizing property by geographic location, and other mundane tasks that must be done to stay in compliance with the numerous types of tax legislation.Through computerization of the routine tasks, the tax managers who are responsible for compliance have more time to read the laws, make interpretations, and ask questions.' The following chart illustrates the incidence and complexity of some of the particularly difficult corporate taxes.
The Computer's Role in Simplifying Compliance with State and Local Taxation,
39 Vanderbilt Law Review
Available at: https://scholarship.law.vanderbilt.edu/vlr/vol39/iss4/7