Sales and Use Tax Review

Our review can be part of our representation during a state sales and use tax audit or to determine potential refund opportunities or unknown tax exposure. This service is provided free of charge and is completed with the least amount of inconvenience for your business. The process includes:

• Discussing and analyzing your business operations to ensure we have a true understanding of your company.
• Reviewing the most recent state sales and use tax audits to determine potential issues to be aware of as well as identifying potential opportunities.
• Reviewing purchase invoices for a sample period to determine the accuracy and completeness of your sales and use tax reporting.
• Reviewing sales invoices and various legal contracts with customers and affiliated entities.

After our initial review, we will relay our findings and provide various options to address these, including:

• Summarizing the potential refund opportunities.
• Summarizing potential exposure items.
• Discussing whether a project should be initialized to seek refunds or address and fix exposure items.
• Discussing changes to current procedures to address potential exposure items.

With the passing of Wayfair, many businesses are concerned and confused about which states require sales tax collection and returns to be filed. A nexus study will look at your company’s potential state liabilities or requirements to file sales tax returns. “Nexus” is simply tax language for having enough contact with a jurisdiction to trigger a filing.

A short interview with appropriate personnel is the starting point for a nexus study in order for our team to gain an understanding of your company’s potential nexus based on all types of business activities. We will do a review of the states in which you have sales to determine if you have economic nexus. Once we make a nexus determination, a discussion on next steps and potential liability will follow to ensure that your business is compliant.

Taxability determinations consider whether products or services you sell are considered taxable in various states. This can be an important determination since under-collecting sales tax from customers can result in you paying your customer’s liability to the state! Taxability determinations can also be used to decide whether you should be paying tax on recurring purchases since use tax is still due to the state on items where the vendor did not charge sales tax.

This service can be highly tailored to your needs and often takes the form of a spreadsheet or flow chart. Often, these types of charts are used by purchasing or billing personnel to reference during the normal course of business to avoid inconsistencies or time-consuming determinations about whether to collect or charge tax.

“Coming clean” can often be the most beneficial approach. For businesses that find they have unreported liabilities in other states, coming forward voluntarily provides the benefits of a reduced “look-back” period and abatement of penalties. Remaining anonymous in these programs until approved is key, so using a third party representative is highly recommended. Often businesses try to register in a state on a go-forward basis and then are surprised by penalties assessed by the state.

Our team will review your potential liability and communicate directly with the state on your behalf (while you remain anonymous), until an agreement is reached so you can come clean with the state without unexpected penalties.