Business
Vertex Highlights Global Indirect Tax Trends for 2022
KING OF PRUSSIA, Pa., April 04, 2022 (GLOBE NEWSWIRE) -- Vertex, Inc. (NASDAQ:VERX) ("Vertex" or the "Company"), a global provider of tax technology
About this update from Vertex, Inc.
[{"type":"text","content":"KING OF PRUSSIA, Pa., April 04, 2022 (GLOBE NEWSWIRE) -- Vertex, Inc. (NASDAQ:VERX) (\"Vertex\" or the \"Company\"), a global provider of tax technology solutions, outlines tax trends for 2022. Corporate tax departments should expect continued transaction tax complexity and these taxes will continue to be an increasingly convenient and effective way for state and local tax jurisdictions to raise revenue. In addition, tax audits around the globe have returned to pre-pandemic levels. According to Vertex Vice President of Tax Content and Chief Tax Officer Michael Bernard, there are a couple of key trends on the regulatory side that will impact the future of transaction taxes: U.S. states are increasingly looking to replace their income tax with more of a “transaction-based source of revenue.” Why? Transaction based revenue streams are less susceptible to adverse economic cycles relative to the income tax. Transaction taxes are generally easier to administer (and audit) relative to the income tax because of the many complex preferences built into the income tax from both a federal and state legislative perspective. Transaction taxes are generally easier to expand by “local jurisdictions” either by implementing new or higher rates. Both state and locals can expand the base easily to new business streams – namely digital products, services, crypto currencies, tobacco, alcohol, firearms and environmental fees. Outside the U.S., countries continue to rely heavily on VAT as seen through stepping up the expansion of real-time and near-time reporting, as well as digitizing the registration process to include a smooth onboarding of taxpayers. In the past year jurisdictions in the U.S. continued to broaden the tax base with 197 new district taxes implemented, the second highest in the last decade. New district taxes were enacted in order to fund community improvements, transportation, transit upgrades, and emergency services, among other necessary public services. In addition, the vast majority of sales tax rate changes in 2021 were increases at the city (85%) and county (72%) levels. This trend is continuing with 23 new district taxes added in the first two months of 2022 bringing the total supported by Vertex to 2,743 including metropolitan, public improvement and resort districts. Outside the U.S., tax administrations are attempting to cl...