How do rate and boundary databases reduce business administrative expenses?
Answer: One of the most difficult tax administration issues for businesses is keeping up with the local taxes and knowing when a sale is inside or outside a local government jurisdiction. Each Streamlined state must provide a database with the tax rate for every local jurisdiction. In addition, each state must provide a database that matches a local tax rate with each 9 digit zip code in every local jurisdiction. A business can look up one address at a time on-line or download the entire database. The states must make the databases available to any business that wants to use them and the state certifies the accuracy of the databases. The states hold a business harmless so that it is never liable for charging too much or too little tax based on this information.