How Automating Compliance Can Help Taxpayers in Turbulent limes.

• Author: Levin-Epstein, Michael
• Position: Avalara Inc. global compliance operations senior vice president Liz Armbruester

In recent years enormous numbers of legislative changes to tax policy at the local, state, and international levels have dramatically affected the corporate tax function. We wanted to learn more about how automation and technology could help taxpayers deal with these changes, so we sat down with a true expert on this issue, Liz Armbruester, senior vice president of global compliance operations at Avalara Inc. Senior editor Michael Levin-Epstein conducted the interview in September.

Michael Levin-Epstein: In the last several years, there have been many changes in tax legislation around the world. What are some of the most important changes that you've witnessed, and what might be in store in the near future?

Liz Armbruester: I'll start out by saying that tax complexity in recent years has not disappointed. It has always been complex and ever-changing, and the past year has continued in that fashion. I'd highlight economic nexus and marketplace facilitator laws. A couple things on that front are noteworthy. First, both Florida and Missouri adopted their remote sales tax legislation this year; they were the last two holdouts. Now every state with a general sales tax (or that will have one, in Missouri's case beginning in 2023) has some form of remote tax law. If you recall, the Supreme Court decision that made remote sales possible happened in 2018, so here we are in 2021, and all states have just now created their version of remote sales tax. Marketplace facilitator laws are also now widespread.

Taking this view more globally, I'd highlight the European Union value-added tax reforms that became effective this year. Three major changes went into effect just a couple of months ago on July 1, including a simplified single VAT return model for the EU.

This is important when we think about the complexity of registration and filing across the twenty-seven member states for businesses selling into and across the EU. The introduction of the single VAT return represents an intentional trend toward simplification.

The second major change that went into effect on July 1 was the removal of VAT exemptions for low-value parcels. The change affects cross-border sellers importing consignments not exceeding [euro]150 and requires that they charge import VAT.

The third piece of legislation now in effect is a deemed supplier obligation on marketplaces for certain merchant transactions. This change is like marketplace facilitator laws in the United States, where...