A recent report from Avalara suggests that businesses should anticipate an increase in sales tax audits in 2024 due to various changes happening at state and federal levels. These changes include advancements in technology such as artificial intelligence, which are prompting lawmakers to reconsider existing tax laws and introduce new ones. Additionally, e-invoicing mandates are expanding globally, with infrastructure being developed in the U.S. for early adopters. Economic pressures are pushing states to seek ways to offset revenue shortfalls, leading to potential increases in tax audits. The IRS’s enhanced enforcement efforts, funded partially by the Inflation Reduction Act of 2022, could also impact state tax audits indirectly. As businesses navigate these changes, they should be prepared for greater complexity in tax compliance requirements, including new thresholds, tax rates, and rules. Adoption of electronic invoicing is also becoming increasingly important, with many countries already implementing or planning to implement e-invoicing mandates. Businesses are advised to stay informed about evolving tax policies and plan for technological advancements to ensure compliance and benefit from increased efficiencies.
State sales tax changes could mean more audits | Accounting Today
