I
Serving Clients
Nationwide I
New &
Growing Businesses
New markets,
products or services raise taxability and nexus issues as well as collection
requirements.
It is essential
that new businesses understand their Sales & Use Tax collection and payment
requirements early on. New businesses can avoid potentially devastating
problems by knowing which of their products and services are taxable, and which
business activities today, or with growth in the future, will trigger nexus in
additional states. Having this knowledge allows businesses to set up sound
compliance procedures accordingly.
Knowing what can
trigger nexus is important because sufficient nexus allows states to require a
business to collect tax on the state's behalf. Many businesses do not realize
that a permanent presence in a state is not the only circumstance that may
trigger a requirement to collect Sales Tax. This puts an additional compliance
burden on the business. Left undiscovered, Sales & Use Tax exposure in
other states will continue to grow and compound with interest, penalties and
potential personal liability.
It's important to
remember that paying Sales Tax is the customer's responsibility with the
business acting as the state's custodian. If businesses fail to collect the
appropriate tax from their customers, the tax becomes their liability.
For growing
businesses, Sales & Use Tax problems often build over time. Businesses
start selling in just one state without having any physical presence in other
states. They have a revenue and business focus, so facing Sales & Use Tax
issues is often left for "later" or for the accountant to handle. See
our Generalist vs. Specialist page.
Expanding your
business into additional states often accompanies growth. Sales force and
marketing expansion, Internet sales, wider delivery of goods or services,
attendance at trade shows, employees residing in other states, and other such
activities can trigger nexus. Adding new products, services and different types
of customers further complicates the situation . New taxability issues may be
either unfamiliar or completely unknown to you and further compound the
undiscovered tax liability exposure previously mentioned.
Most states can
look back to day one of operations when auditing a business that has never
filed a Sales Tax return.
If planning to
grow their business and sell or go public, smart business owners start with the
end in mind. They will stay focused on the fact that the business will
eventually go under the microscope during a Due Diligence Review from the
potential buyer's or underwriter's financial advisors. One purpose of the Due
Diligence Review is to protect the purchaser from hidden liabilities through
discovery. Should hidden liabilities be uncovered, the result will typically be
a lower selling price or higher required escrow amount. Proactive owners can
ensure a favorable Due Diligence Review by addressing Sales & Use Tax
issues from day one. Read more on this in the Mergers & Acquisitions section.
Whether your
business is just starting out or is long-established, Olivier & Associates'
professionals can help. We assist with the taxability determinations to
establish what's taxable and what can be classified as exempt. Client's call on
us to handle nexus reviews to determine in what states there may be an
obligation to collect and remit. We also develop procedures for proper
compliance including handling resale certificate and collecting the correct
amount of Sales Tax. Some clients need help determining which automated
compliance software or systems are best for them. Outsourcing some or all of
the compliance process is another big decision about which we provide informed
input.
At Olivier &
Associates, we serve businesses that want to keep their competitive edge by
successfully navigating the ambiguous, constantly changing, and highly
intricate maze of Sales & Use Tax regulations.
Clearly, it's
best to get your business in order early. If that hasn't happened, we can still
help. Contact us today or call 1-888-466-2829 for a
no-obligation consultation to discuss your situation and the potential
remedies.
