5 Sales Tax Miscalculations That Lead to Overpayments

Unfamiliarity with new laws can cause even sophisticated companies to unwittingly overpay sales taxes on digital products, SaaS, and subscriptions

Published on Mar. 8, 2026

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As federal funding for state and local governments declines, many are turning to sales taxes on business services as a key revenue source. However, the evolving definitions of taxable products and nexus have created confusion, leading even sophisticated companies to unwittingly overpay sales taxes, especially those doing business in multiple states. This article outlines five common miscalculations that can result in overpayments, including assuming vendor invoices are correct, lack of clarity on where digital products are purchased or used, outdated financial software, and accepting audit findings without review.

Why it matters

Overpaying sales taxes can significantly impact a company's profitability, with the average EBITDA being 6-10%. Identifying and recovering these overpayments can provide a consequential boost to the bottom line, making it crucial for companies to closely review their sales tax practices and seek expert guidance.

The details

The article highlights several examples of companies overpaying sales taxes, such as a financial advisory subscription service headquartered in New York that automatically bills sales tax to all customers, even those in tax-exempt states like New Jersey. The five common miscalculations identified include: 1) Assuming vendor invoices are correct, 2) Lack of clarity on where digital products are purchased, 3) Lack of clarity on where products are used, 4) Outdated financial software, and 5) Accepting audit findings without review.

  • In 2026, federal subsidies and grant funding continue to decline for state and local governments.
  • The Supreme Court's Wayfair decision of 2018 expanded the definitions of taxable products and nexus.

The players

William Flick

A thought leader in sales tax policy and process, and a Managing Director at EisnerAmper Advisory Services.

EisnerAmper Advisory Group LLC

A business consulting group that provides advisory and non-attest services, including sales tax expertise.

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What they’re saying

“If a company or office is located in a SaaS sales tax exempt state, not only are sales taxes not owed, but the customer company is likely to be entitled to a sales tax refund of those taxes already paid, going back up to three years.”

— William Flick, Managing Director, EisnerAmper Advisory Group (EINPresswire.com)

“When one considers the average EBITDA of most companies is in the 6-10% range, savings on unwarranted sales taxes, can be a consequential contributor to profitability.”

— William Flick, Managing Director, EisnerAmper Advisory Group (EINPresswire.com)

What’s next

The article does not mention any specific next steps, as it focuses on outlining the common sales tax miscalculations that lead to overpayments.

The takeaway

This article highlights the importance for companies, especially those operating in multiple states, to closely review their sales tax practices and seek expert guidance to identify and recover any overpayments. With the rapid changes in sales tax laws and definitions, relying on vendor invoices or outdated financial software can result in significant profit losses, making proactive sales tax management a crucial part of maintaining profitability.