Are you manually updating the tax tables in Microsoft Dynamics using a ZIP code based system? If so, finding the correct sales tax rates and keeping them updated can be a time consuming task that is also prone to errors. Were you aware that using a ZIP code to calculate sales tax rates is only accurate some of the time because ZIP codes were not created to calculate sales tax, but instead were created to deliver the mail? It is not unusual to have multiple sales tax rates within a single ZIP code because a majority of states have multiple, overlapping tax jurisdictions, and in some cases impose specialty taxes for transit, stadiums, etc. Basing sales tax rates on a ZIP code could also cause your business huge hassles if you are remitting to the wrong jurisdiction.
The key to accurately identifying sales tax jurisdictions is to pinpoint the correct destination or location of the transaction using geo-location technology; and
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By Avalara,