Product feedback on Sales Tax

By Ben Bosch on Apr 3, 2019 4:05:30 PM

We have received many requests for the indication of tax on orders and quotes as a separate item on the Skynamo mobile interface, Skynamo Insights, as well as on emails and documents generated by Skynamo. 

Skynamo is an international organisation with customers in a number of other countries and a goal to grow and expand globally.  In South Africa there are just two tax rates, 15% or Zero rated (Tax exempt). Outside South Africa, tax is a complex problem.  Most countries in the world have sales taxes or value-added taxes at all or several of the national, state, county, or city government levels [11] with reduced rates in some cases, for basic food items, groceries, art, books and newspapers.[14] In some regions there are multiple levels of government which each impose a sales tax.  

  1. For example, sales tax in Chicago (Cook County), IL, USA is 10.25%, consisting of 6.25% State tax, 1.25% City tax, 1.75% County tax and 1% Regional transportation authority tax. Additionally Chicago also has the Metropolitan Pier and Exposition Authority tax on food and beverage of 1% (which means that on some items the rate is 11.25%).[15] 

  2. Rates can vary depending on where the products are sourced, where the transaction is registered or where the items are accepted or delivered. We have recently spoken to individuals who admitted to driving to the same shop in a different county or city to purchase an item there, in order to avoid a higher tax rate. 

  3. To further complicate matters, sometimes these rates compound, meaning that the rate is applied after the previous rate, implying tax on top of other tax rates or it is applied after shipping costs implying tax on shipping. This results in an “effective tax rate” that is often different than the indicated rate. 

  4. Another indication of the complexity of this problem is the number of online platforms and services that are available to determine tax rates in different regions all over the world. We have been in contact with Avalara, Vertex, TaxJar, Zip-Tax, and other services to try and broaden our understanding. 


Consider again that Skynamo is a mobile solution that functions off-line. Transactions can be logged from anywhere with varying degrees of information about the products, editable prices, deals and transaction details. This does not mean that it cannot be done.

It means we have to research and understand the problem properly and consider different models and integrations with third party services in order to solve it properly.   

Like many other departments we have a number of projects running at the same time, requiring resources to scale Skynamo, make our infrastructure more stable and secure and build out features. In terms of features our main focus at the moment is calendar integration and it will likely take a few months to release the minimum viable solution. We have however started the research phase of the tax project and should soon be able to have a better scope of work and timeline. After the research phase there is a chance that we will be able to implement a limited scope solution that covers the basic cases. 

Please note however that Skynamo is not a replacement for your ERP system or accounting package. It is developed to give the sales team access to information that would help them in the sales conversation. The emails of orders quotes and Credit requests were developed primarily to notify office personnel of new orders in cases where they were not integrated. It is not designed to replace the formal documents normally issued by the ERP or accounting packages.  
comments
0