Outsourced Sales Tax Compliance + Advisory from Your CPA firm
Published on by Cheryl Ganim in Consulting, State Local Tax, Tax Services
The intersection of the landmark 2018 Supreme Court ruling in South Dakota v. Wayfair with the rapid expansion of doing business in multiple states using various selling platforms has quickly complicated sales tax compliance. Most states followed suit with the Wayfair ruling mandating businesses without a physical presence in a state to collect and remit sales tax when certain economic thresholds (generally $100,000 in sales or more than 200 transactions) are exceeded.
Since 2018, businesses have had requirements to register to do business, collect sales tax, and file returns in multiple jurisdictions at the state and local level, after the business has established economic nexus. Prior period returns may need to be filed too if the date nexus was established was missed. Voluntary disclosure programs may be available to limit penalties, interest, and liabilities from potential sales tax lookback periods. Merger and acquisition activity can impact sales tax liabilities and filing requirements.
Benefits of Sales Tax Advisory and Compliance Services
Access to Technical Expertise and Automation
Outsourcing sales tax compliance means working with an experienced team that assists your company with nexus analysis, analysis of exempt and taxable sales, sales tax exposure and potential refund opportunities, sales tax software onboarding, handling monthly sales tax compliance, providing advisory services on state tax laws, merger and acquisition sales tax due diligence advisory, compliance best practices, notice response, voluntary disclosure, and audit defense.
Manage costs and opportunity costs
The costs associated with managing sales tax compliance internally can be significant – hiring new employees, investing in new software and systems, ongoing training, lost institutional knowledge, and the need for oversight and quality assurance. Sales tax compliance management removes the burden from your team’s shoulders, freeing up resources.
Peace of mind
Forty-five states, the District of Columbia, and thirty-eight local jurisdictions currently collect sales tax. Each jurisdiction has its own set of rules and tax rates (there are over 13,000 sales tax jurisdictions in the US). Sales tax outsourcing and automation can bring peace of mind that your business has accurate filings and professional advisory from sales tax experts.
Talk to a pro
Effectively managing sales tax compliance is challenging. Partnering with an expert provides a practical and cost-effective solution so you can focus on growing your business. For many, a good first step is a sales tax nexus checkup. Or, read about avoiding common sales tax compliance mistakes. You can also get insights into the impact of remote work on tax withholding or contact us to set up a free consultation. As always, we’re here to help.
