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Case Studies
Shipping Or Receiving Across State Lines Has Consequences
Proper Sales Tax Planning Can Save Big Money
A marketing company that provides promotional, raffle and contest prizes was having all of their purchased goods shipped to their main location for redistribution to the prizewinners. The unfortunate consequence to this setup was that a Use Tax was due on all items received.
The company sought professional advice to see if there were any more tax-friendly alternatives. First, we analyzed the drop shipment laws in the states where the company's suppliers were located. Then we preformed a nexus study on the company in connection with the fulfillment research. Based upon this information, our professional was able to develop and assist the company in implementing a Sales & Use Tax strategy which
eliminated the Use Tax on 90% of the prizes.
The Result: The marketing company saved approximately $100,000 annually in Use Tax.
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