If a sales tax auditor walked through your company’s door tomorrow, would you be prepared for a sales and use tax review? Would you feel confident in your records, sales and use tax procedures, and compliance? DHJJ’s expert professionals in our State and Local Tax (SALT) group can help with these concerns. We can perform a sales and use tax review to assess potential state tax liabilities and discover possible tax saving opportunities.
Where Does a Sales and Use Tax Review Start?
Our sales and use tax review starts with a discussion with our client. We gain an in-depth understanding of their business, including the states in which they have activity or sales that exceed the state threshold. Next, we evaluate the existing sales and use tax procedures, and then offer approaches to improve their accuracy and effectiveness.
Nexus and Voluntary Disclosure Agreements (VDAs)
We sometimes find that nexus exists in a certain state in which our client is not currently filing. Nexus is the minimum connection with a state that requires filing and paying tax. If nexus is present, we determine if the sales are subject to sales tax. If so, we can make suggestions for moving forward as well as dealing with past taxes. One route we may suggest is to pursue a voluntary disclosure agreement. A voluntary disclosure agreement (VDA) is an opportunity for a company to file and pay back taxes for sales and use tax. The use of a VDA can reduce the interest and penalties assessed and limit the number of years that the state will go back to assess tax. The VDA process can be complicated, but our SALT group can handle any questions and discussions with state auditors.
Even in states in which our client may already be filing, there may be some efficiencies or accuracy related procedures which we can assist our client in implementing. We will request samples of invoices, bills, and sales tax returns to verify accuracy for reporting sales and use tax. We also analyze the current sales and use tax process to see if there is a more convenient way to handle the administrative burden.
Due to the ever-changing sales tax laws in all the different states in which our clients operate, we advise an annual sales and use tax review to determine if any additional states require filing. This allows our clients to keep abreast of new laws and have more time to focus on growing their business.
How Can DHJJ Help?
DHJJ’s State and Local Tax (SALT) group navigates the complexities of various tax laws that affect our clients’ business. Although our team focuses on keeping clients in compliance, we also identify tax savings opportunities in the state and local tax area. One of our many specialty areas is sales and use tax, which can be very complex, depending on the state(s) involved. Our DHJJ SALT team has been contracted to consult on numerous companies’ sales and use tax procedures to find the most efficient, effective, and accurate way to report and pay this tax. If your company would benefit from a sales and use tax review, please contact our SALT group at (630) 420-1360 or fill out our contact form.
