North America

How a Cloud-Based Sales Tax Solution Benefits Your Business

Olivia Bilodeau
May 11, 2021

This blog was last updated on February 23, 2024

As the digitization of sales tax continues to raise compliance stakes worldwide, businesses require a complete solution for real-time tax calculation. User-centric solutions that operate on the most up-to-date regulatory requirements can help organizations avoid backtracking and making adjustments for evolving regulations after the fact. This is where a cloud-based sales tax solution comes into play.

There are numerous potential challenges with running a sales tax engine on-premise, which is why organizations of all sizes have moved to the cloud. Businesses that are considering migrating to SAP S/4HANA will especially benefit from making the switch.

ASUG, the world’s largest SAP user group, conducted research in collaboration with Sovos to better understand the sales tax solution experiences and change management processes of customers that use SAP enterprise resource planning (ERP) systems. The research also explored why organizations opt for on-premise or cloud-based solutions.

Cost reductions (hardware/software costs and/or support staff costs) and strategic initiatives or digital transformations were the top reasons companies host sales tax solutions in the cloud. Additionally, the number one reason respondents that currently host their sales tax solution(s) on-premises are planning to move their solution(s) to the cloud is to stay current with ERP evolutions and avoid aging out of support.

Approximately two-thirds of respondents (60%) said they are planning to move or are considering moving to the cloud. However, organizations are not strangers to cloud-based sales tax solutions. One-third (34%) said they are hosting their sales tax solution(s) on-premises, though a combined 66% use a cloud solution of some kind.

When cloud solutions are used, the most popular environments are a hybrid cloud (some on-premises private cloud, some public or hosted cloud) followed by a software-as-a-service (SaaS), cloud-based solution.

Nearly half of respondents (47%) said the top benefit in hosting sales tax solutions in the cloud is reduced manual work for IT staff, with 35% citing better integration with other systems and 33% saying faster updates are delivered to the business.

A solution to keep you moving forward

Switching to the cloud from an on-premise solution can make a huge impact on an organization.

For example, an existing Sovos client had outgrown the ability of an on-premise based solution to keep pace with a rapidly evolving tax landscape. The company had become too dependent on IT to manage its tax engine and a reliance on manual and paper-based solutions was impacting the organization’s ability to scale. Being forced to run continuous manual updates also created an undue burden on a small team.

Moving from an on-premise tax engine to one in the cloud helped to better manage all sales tax obligations. The company gained better oversight and management of exemption certificates and evolving tax forms and had a completely automated process for tracking and updating regulatory changes. There was also less reliance from tax on the internal IT team and a significant reduction in dedicated IT for tax related issues.

Ready to see if a cloud-based sales tax solution could be the key to your business’ success? Reach out to our team of experts to see how Sovos can help.

Take Action

Ready to learn more about how moving to a cloud-based sales tax system is beneficial? Check out our on-demand webinar with ASUG where we dug into the survey results.

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.

Author

Olivia Bilodeau

Olivia Bilodeau is Product Marketing Manager at Sovos for the Sales and Use Tax line of business. Her main areas of focus are to communicate the value of Sovos’ solutions through messaging, positioning, enablement & more, and help bring new products to market to make client’s lives even better. She enjoys connecting and building relationships with people, whether they are a client, fellow employee, or a friendly face at the local coffee shop. When she isn’t brainstorming different ways to solve tax for good, Olivia loves exploring the town she just moved to in New Hampshire and decorating the new house.
Share this post

E-Invoicing Compliance North America
May 29, 2025
Global E-archiving Compliance: The Essentials of E-invoice Storage

This blog was last updated on May 29, 2025 The digital business landscape is forever changing, yet one thing is certain: electronic archiving is more than a convenience – it’s a matter of compliance. As governments worldwide invest in digital tax transformation initiatives like e-invoicing and e-reporting, a complex web of e-archiving requirements that vary […]

states with no sales tax
North America Sales & Use Tax
May 27, 2025
The 5 U.S. States with No Sales Tax

This blog was last updated on May 27, 2025 In a country where sales tax is the norm, a handful of states stand out for going against the grain—they don’t impose any statewide sales tax at all. That’s right—no last-minute filings, no scrambling to collect and remit every month. At least, not for sales tax. […]

what is sales tax
North America Sales & Use Tax
May 16, 2025
What is Sales Tax? How it Works & Why It Matters

Uncover what sales tax is, how it works! This guide provides everything from rates and exemptions, to how it varies by location and product type.

consolidation in the wholesaler tier
North America ShipCompliant
May 15, 2025
When the Middle Shrinks: What Consolidation in the Wholesaler Tier Means for the Entire Market

Discover how consolidation in the wholesaler tier impacts market access in the U.S. beverage alcohol industry and explore alternatives like direct-to-consumer shipping.

unclaimed property laws
North America Unclaimed Property
May 14, 2025
From Crypto to NFTs: The expanding scope of unclaimed property laws

This blog was last updated on May 14, 2025 Last month, a cross-functional group of Sovos unclaimed property experts—including folks from product development, product marketing, managed services, our general counsel’s office, and the consulting team—traveled to Tucson, Arizona to the Unclaimed Property Professional Organization’s annual conference. We spent the week diving deep into all things […]

See for yourself how the Sovos Compliance Cloud can meet your business' unique tax compliance challenges.
Book a Demo
© 2025 Sovos Compliance, LLC. All rights reserved.
Why Sovos?
Resources
About
Products
Indirect Tax Suite
Information Reporting and Withholding Suite
Specialty Products
Solutions
By Tax or Document Type
By Industry
By Team or Initiative
By Region
OSZAR »