US SALES TAX CONSULTANT
US Sales Tax in companies can often be the overlooked orphan child. States impose the burden of collecting their tax on businesses. Complicated tax systems are integrated into their point of sale, websites, and ERP systems. Once implemented, companies assume that the automated system they paid so dearly for will just “handle” this aspect of their business.
Times change, taxes change, and businesses and their systems evolve with churning personnel often unaware of this.
In the US, there are over 12,000 tax jurisdictions, with changes happening every month. Automated US Sales Tax systems like Avalara, Vertex and Tax Jardo a great job of keeping up with the rates for those locales, charging customers correctly for their purchases, however maintaining the system and how it interacts as your business evolves is often neglected.
UK BASED US SALES TAX CONSULTANT
A client asked to review their system and history. Sometime in the past, all of the state nexus settings were turned on, most likely by an employee charged with filing the tax returns. As a result, the client charged US Sales Tax in every taxable state to its customers. They were not registered in all of the states, and being a “balance sheet item”, wasn’t adversely affecting performance (actually cash flow improved!). Their system history recorded tax collected from customers, now many years ago, and the funds were not remitted to their respective tax authorities. The client had a problem, feared the consequences, and lacked the staffing resources to focus on sorting it out. I enjoy solving these kinds of problems and settling up with the US Sales Tax authorities. In this case, I saved them the penalties, many of which could have been 100% of the tax, as this was clearly an inadvertent tax fraud. I do this kind of thing through various means, pending the level of tax owed.
Interest accrued on the tax owed is rarely forgiven unless the state has an amnesty programme going. Plan on paying the interest is what I advise, after all, you’ve used their money for a period of time.
Lean finance staffs and anxiety of dealing directly with tax authorities can often lead to procrastination in tackling these issues. Being focused on these matters allows me the time to come up with pragmatic solutions, reducing penalties, and achieving full compliance. I approach this systematically, moving my clients to full tax US Sales Tax compliance, and setting it up in a way that prepares them for potential audits. Should they happen, these are manageable and the tax returns filed will tie back to the company’s books and records.
Have you added new products or services to your offerings? Were these assigned the appropriate US sales tax code the automated systems require? Are there exempt customers that are being charged tax unnecessarily? Does your customer service team have the right answers should customers inquire about taxes charged? I enjoy digging in and solving these and other tax problems and getting clients to a compliant state of affairs.
Feel free to contact me to discuss your situation.