Charles Maniace | Source | Vice President - Regulatory Analysis & Design at Sovos

But states aren’t fully equipped to enforce the requirements for ecommerce sellers. My gut is their audit methodologies and approaches have significant manual elements, relying on traditional audit approaches like physically locating themselves at the seller and examining their books and records. State tax administrators should take a closer look at conducting digital audits, using computer power to analyze information about transactions to determine if a seller is compliant. If taxpayers were required to prepare and submit digital audit files to the DOR, states could conceivably, without dramatically increasing their audit staff, broaden their tax base. I don’t think they’re thinking about that right now in response to Covid-19, but expanding your ability to ensure compliance by remote sellers is more digestible than stricter audits against current taxpayers, and more palatable than new taxes or increasing rates.