Sales and Use Tax Consulting
Managing Sales and Use Tax Responsibilities

Filing sales tax returns and keeping up on taxability of products and services across multiple states can be tough and time consuming. Add differing economic nexus threshold requirements for sales tax registration layered with varied customer types such as wholesale, resale, manufacturers, contractors and non-profits just furthers the difficulty and adds to the audit risks of noncompliance. If there have been mergers or acquisitions, managing sales and use tax compliance responsibilities can really get complicated.

We bring peace of mind

By helping companies identify, understand, resolve and manage their ongoing sales and use tax responsibilities, owners and responsible management will be able to settle the unknown and focus on the core business.
This commonly entails understanding their current and prior business activities and their customer types and markets, reviewing sales records, determining prior liabilities and discussing the pros and cons of various options to resolve them.
We then work within the company’s risk tolerance, goals and budget to resolve prior liabilities and establish a path forward to compliance.

Sales Tax Strategies for Large Dollar Purchases
Effective sales and use tax strategies can lead to significant savings for businesses on large dollar purchases.

Here are some key strategies to consider:

Understand Exemptions and Incentives: Many states offer sales tax exemptions for specific types of purchases, such as manufacturing equipment or renewable energy systems. Research applicable exemptions and incentives that can reduce or eliminate sales tax on large purchases.

Leverage Bulk Purchasing: If your business frequently makes large purchases, consider negotiating bulk buying agreements with suppliers. This can not only lower the purchase price but may also provide opportunities for tax savings through exemptions.

Evaluate the Timing of Purchases: Timing can play a crucial role in sales tax liability. For instance, some states have specific tax holidays or reduced rates during certain periods. Planning purchases around these times can lead to substantial savings. Additionally, the start of assessments on items subject to business personal property tax may be pushed to the next year.

Utilize Tax-Exempt Entities: If your organization qualifies as a tax-exempt entity, ensure that you are using and retaining access to the appropriate documentation when making large purchases. This can help avoid unnecessary sales or use tax charges upon audit.

Consult with a Sales Tax Expert: Given the complexities of sales and use tax regulations, consulting with a sales tax expert can provide tailored strategies for your specific situation. They can help identify potential savings and over-payment refund opportunities while helping ensure compliance with applicable laws.

Establish a Central Purchasing Entity: Entity buys products and services for resale and then properly manages sales tax on sales to related entities for proper and effective management of sales and use tax obligations.
By implementing these or other sales and use tax strategies, businesses can effectively manage their tax liabilities on large dollar purchases to prevent over-payment of tax and minimize audit risk, ultimately improving their bottom line.

Mergers and Acquisitions - Minimize Sales and Use Tax
Mergers and acquisitions (M&A) can be complex transactions with significant financial implications, including sales and use tax liabilities.

Here are strategies to minimize these taxes during M&A activities:

Conduct a Thorough Due Diligence: Before finalizing any M&A deal, conduct a comprehensive nexus review of the target company's sales and use tax compliance. Identify and calculate any outstanding liabilities and potential risks such as identifying sales tax registration and prior tax obligations in States or local jurisdictions where the company isn’t registered and filing returns.

Review For Other Tax Type Obligations: The Seller may also have unaddressed income tax, employment tax, franchise tax, business occupation taxes and business personal property tax etc. due. These are commonly identified when reviewing for sales tax nexus issues and resolved through Voluntary Disclosure Agreements.

File Bulk Sale or Similar Notifications: Some states require notification of the sale so they can review the Seller’s obligations. For the Buyer, this protects against Successor Liability or inheriting the Seller’s prior liabilities. Request Tax Clearance Certificates where available.

Structure the Transaction Wisely: The way a merger or acquisition is structured can have significant tax implications. Consider whether an asset purchase or stock purchase etc. is more beneficial from a sales and use tax perspective. The structure type can have significant impact on taxation of the assets. Include sales and use tax impact not just the typical income tax impact. Obtaining a higher than market value on assets for income tax depreciation benefits will likely result in higher sale and use tax obligations.

Utilize Available Exemptions: Certain transactions may qualify for sales tax exemptions, such as those involving the transfer of intangible assets or specific types of property. Understanding these exemptions can help reduce tax liabilities during the transaction.

Escrow Funds and Negotiate Tax Indemnities: In the Purchase Agreement, include tax indemnity statements and require the Seller to escrow part of the purchase price for 3-4 years or more depending upon the States involved and their look-back period. Protect yourself from known and unknown sales and use tax liabilities that may arise post-transaction. Note: Taxing authorities don’t have to honor such as they weren’t part to the Agreement; however, it gives them a place to start. It also gives the Buyer access to the Seller’s escrowed funds in the event of an audit or other assessment for the Seller’s prior responsibility.

Engage Sales Tax Professionals: Given the intricacies of sales tax laws and regulations, working with sales tax professionals during the M&A process is crucial. They can provide insights into potential tax implications and help develop strategies to minimize liabilities.
By proactively addressing sales and use tax considerations during mergers and acquisitions, businesses can navigate these complex transactions more effectively and protect their financial interests.

Sub-contracting for accountants, CFO and CEO Outsourcing Firms
Sub-contracting for Accountants

Businesses look to their Accountants to handle all of their business tax needs As an accountant, you may encounter clients with intricate sales and use tax issues that require specialized knowledge or sales and use tax may just not be a tax area you care to handle.

Our sub-contracting services allow you to expand your offerings without the overhead of hiring additional staff. We work seamlessly with your team to provide expert sales tax consulting, ensuring your clients receive the highest level of service. Whether it’s compliance, audits, or strategic planning, etc. we’re here to support you and your clients every step of the way.

CFO and CEO Outsourcing Firms

For CFOs and CEOs looking to optimize their financial operations, our outsourcing services provide a strategic advantage. We offer comprehensive sales tax consulting that integrates with your existing financial strategies. Our team can handle everything from tax compliance and reporting to risk management and strategic planning. By outsourcing your sales tax needs to us, you can focus on driving your business forward while we ensure your tax obligations are met efficiently and effectively.

Temporary Staffing Fill-in
In today’s fast-paced business environment, unexpected staffing shortages can disrupt operations. Our temporary staffing fill-in service provides you with qualified tax professionals who can step in and manage your sales and use tax responsibilities. Whether you need support during peak seasons, employee absences, or project-based work, our experienced staff is ready to assist. We ensure a smooth transition and continuity in your sales tax processes, allowing you to maintain productivity without missing a beat.

Situational Needs
Every business faces unique challenges that require flexible solutions. Our situational needs service is designed to address specific sales tax issues as they arise. Whether you’re dealing with a sudden audit, a change in tax legislation, or a new business venture, our team is equipped to provide immediate support and guidance. We assess your situation and develop a customized plan to navigate the complexities of sales tax, ensuring you remain compliant and informed.

Training
Empowering your team with knowledge is key to effective sales tax management. Our training programs are tailored to meet the needs of your organization, whether you’re a small business or a large corporation. We offer workshops, seminars, and one-on-one training sessions that cover essential sales tax topics, compliance requirements, and best practices. By investing in training, you equip your staff with the tools they need to handle sales tax confidently and efficiently.

Taxability Determination Options
Quick Reference Sales Tax T&E Chart (Taxable vs. Exempt)
Provides a summary answer chart for applying taxability across multiple states, but does not cover nuances that may change the answer.

Taxability Matrices
Provide a determination of the taxability with a more detailed look at specific products and services with descriptions, background information, and the tax code or other references.

Letter Rulings
Formal determinations from States or local jurisdictions when want a specific answer regarding taxability or obligations

Nexus Risk Analysis
Where do you have to register and collect sales tax or remit use tax?
Determine where sales tax Physical Presence Nexus or Economic Nexus thresholds have been or are close to being exceeded and triggering an obligation to register and collect sales tax.
Triggers include common physical presence triggers like a store front, inventory, leased goods or other assets employees or contractors living in or with activities in a State or local jurisdiction. Economic nexus triggers are typically lumped under the number of transactions and/or the sales volume, but other nexus triggers can include advertising, affiliates, intellectual rights such as users of software licenses and other digital services.
Many nuances go into determining nexus. States typically have their own nexus activities questionnaires with a host of very specific questions.

Our team can complete a comprehensive nexus risk analysis to determine your areas of proper compliance, if and where registrations are past due and an estimate of the tax, interest and penalties due by State if applicable.