State and Local Tax Compliance: 5 Tips to Minimize Exposure and Maximize Revenue

4. If you have significant sales tax collection and remittance amounts, reserve a reasonable amount of cash to allow for expenses to cover process errors that may lead to penalties.

Each state has legislation that defines the different taxability of goods, typically known as tangible personal property or services sold within a given jurisdiction. When computing tax manually, you have a greater chance of erring on the range of variation in the rules.