If you or your employee spends as little as a day working in another state, you could be violating state tax laws if you don’t file a tax return there, according to a recent article on the CNNMoney blog. Each state has its own rules for reporting income, and frequent business travelers could be responsible for filing dozens of different state tax returns. For organizations whose employees travel regularly for business, travel expense management tools are essential.
Nine states charge no income tax, but others can require tax returns if you go over minimum time spent in the state or income earned while there, according to CNNMoney. Requirements for withholding and travel expense management can also vary by state.
In the future, a bill called the Mobile Workforce Simplification Act could make compliance easier, if it passes Congress. At present, organizations balance the risk of an audit and penalties against the cost of implementing complex, multistate withholding.
A fully automated accounting system that includes expense report software can ease the burden of managing complex compliance and reporting tasks, while helping to stop cost leakage. The right tools are the key to effective auditing. A tool like Chrome River AUDIT can streamline the approval process and help you focus on transactions that require the most attention, such as expense reimbursements for frequent travelers. A strong rule set is able to analyze expense charges and even attributes of the charges.
Due to complex and conflicting state income tax regulations, automated travel expense management software is essential for businesses and organizations whose employees travel regularly for business.
As always, we appreciate your feedback. What do you think about the Mobile Workforce Simplification Act? Do you expect Congress to pass the bill? How has your organization approached the challenge of working in multiple states? Let us know by posting in the comments section!
- When Cash (Control) is King: Is Your Accounts Payable Strategy Optimized for a COVID-19 World?
- Getting the Most Out of Your Spend Data with Emburse Insight Advisor
- How We Did It: Supporting Front Line Healthcare Workers During the COVID-19 Outbreak
- Managing Traveler Safety in a Post-Coronavirus World
- Controlling Car Rental Spend With Car FOLIO
Our choice of Chrome River EXPENSE was made in part due to the very user-friendly interface, easy configurability, and the clear commitment to impactful customer service – all aspects in which Chrome River was the clear winner. While Chrome River is not as large as some of the other vendors we considered, we found that to be a benefit and our due diligence showed that it could support us as well as any large players in the space, along with a personalized level of customer care.
We are excited to be able to enforce much more stringent compliance to our expense guidelines and significantly enhance our expense reporting and analytics. By automating these processes, we will be able to free up AP time formerly spent on manual administrative tasks, and enhance the role by being much more strategic.