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Sales & Use Tax Tips for July 2010
A SALES TAX MATRIX: A WISE INVESTMENT
Are You Driving Your Sales/Use Tax Compliance Process Through The Rear View Mirror And Unknowingly About To Go Over A Cliff?
Many companies are not aware that they may have sales and use tax liability exposure because they are unaware of jurisdictional rules. These unknown or undiscovered liabilities accrue interest and penalties, making a bad situation worse. Corporate officers may be held personally accountable for these liabilities. However, this does not have to happen.
Generally sales and use taxes are the expense of the customer and only become a company's debt when not properly collected and remitted. Sales and use taxability matrices provide a critical business decision tool, customized to match your state specific products, services and business model. They provide the actionable information necessary to eliminate question marks and unknown risks by proactively enabling the effective management of your sales/use tax compliance process.
What is peace of mind worth? Taxability matrices are a great financial investment that will pay for themselves many times over in the future in terms of reduced audit assessments and related professional fees. Every business has a unique set of facts and questions about the way they do business each day with clients/customers. A sales/use tax matrix tailored for your business is not something that is available off-the-shelf unless you have created it yourself or it has been designed, formatted and created by a sales/use tax, professional specialist such as ourselves. Without such a management tool at your disposal, your business could easily take a wrong turn down a very costly road involving a huge tax debt along with high penalty and interest charges.
The primary reason companies spend money on tax services is because the financial benefit/cost equation makes good business sense. It is easy to see that paying a $50,000 fee for professional audit assistance, instead of the alternative -- paying a $1 million audit assessment, makes sense and is a great investment. This same financial principal applies to a taxability matrix.
With financial deficits and hungry for cash, all states are becoming exponentially more aggressive in conducting sales/use tax audits. If your company happens to be either improperly executing your sales/use tax compliance process because you are unaware of taxability issues such as applicability and tax rates or are not aware of sales/use tax nexus and registration requirements in states in which you have been doing business, perhaps you should investigate the benefits of taxability matrices. If you do material amounts of multi-state business, taxability matrices could be the preventive, no-risk solution compared to the potential self-created, destructive liability exposure you may cause your business due to not knowing what you don't know.
Do you want to continue rolling the dice as it were and taking avoidable risks or do you want to take positive action that will minimize those risks for a very reasonable investment that just keeps giving back?
To learn more about customized taxability matrices or should you have any other questions or require assistance please Contact us today. Or call 1-888-466-2829 to speak with an Olivier &
Associates Sales and Use Tax professional for a no-obligation consultation about your Sales & Use Tax issues.
Please click here for more Sales Tax Tips or visit our website at www.oatax.com for information. For additional insight on common sales tax concerns, please see the Did You Know? section of our website.
* This tip is intended to provide general information only and is not to be considered as a substitute for professional advice.
