Corporate Close-Up: Time to Move Away From State Tax Spreadsheets?

Each year states enact a dizzying array of tax cuts, credits and other incentives to lure businesses to their jurisdiction. Despite the volume of diverse state tax laws U.S. businesses must keep track of – and the extensive analysis required to make sound decisions about corporate expansion – most businesses still rely on Excel for critical tax processes. This is problematic because it places the burden of updating and maintaining state tax law changes on state tax teams.

Only 22 percent of U.S. tax professionals reported using tax software for state tax analysis, according to a survey conducted by Bloomberg BNA.   

But this is likely to change with the recent release of the BNA State Tax Analyzer. The new software application supports tax professionals in a number of key state tax functions such as what-if planning, tax provision analysis, quarterly estimates, and tax audit response. This cloud-based solution delivers a full-audit trail, permissions control, and automatic tax-law updates.

"With the growing complexity that goes hand-in-hand with tax reform, I like the ability to create multiple scenarios that allow me to easily compare the impact of these tax changes.” said Peter Quiroz, Unit Manager, HCSC, BNA State Tax Analyzer beta user.

The majority (94 percent) of BNA State Tax Analyzer beta testers polled indicated that they currently use spreadsheets for state tax planning and provision -- which puts the burden of updating and maintaining state tax law changes and calculations on already time-strapped tax teams. In addition, usage of spreadsheets for state tax analysis increases the potential for human error and risk, especially where state tax analysis supports financial statement work in the area of the tax provision.

This widespread habit of dispersing vital corporate tax and accounting information across spreadsheets is problematic for multiple reasons. For one, Excel dependency promotes human error. As discussed in a previous Bloomberg BNA report, Top Tax & Accounting Mistakes That Cost Companies Millions, botched data entry, accidentally overwritten files, and deleted formulas are not only an inconvenience, they can skew a company’s financial statements and attract auditor scrutiny. It also limits a company’s ability to model complex tax scenarios, jeopardizing its ability to make strategic decisions about finances or corporate growth.

Key benefits of BNA State Tax Analyzer include: 

  • Powerful and accurate state tax analysis. Bloomberg BNA's renowned tax expertise is built right into the software, providing customers with the most up-to-date calculations and projections. Side-by-side comparisons allows for detailed "what-if" scenario analysis showing calculation differences between two scenarios, or across multiple scenarios.
  • Certainty, transparency, and control. BNA State Tax Analyzer includes automatic calculations for all states that have an income tax, as well as for the District of Columbia, for the years since 2010. In addition, it's the only product available today that includes enacted future tax law, providing customers with the most accurate multi-state projections and tax forecasting possible.
  • Fast Start-Up Time. Accessibility via any Web browser and a familiar grid-like approach allows users to be functional in the system within hours.

BNA State Tax Analyzer is designed to address the state income tax modeling and analysis needs of the Global 2000 across multiple industries including retail and manufacturing. For more information about BNA State Tax Analyzer, visit here