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Sales & Use Tax Tips for May 2008
Are You Registered Everywhere You Need To Be?
Why Should A Company Conduct A Diagnostic Review?
Businesses grow and expand. Sales Tax laws change frequently.
Companies that operate in multiple states and local jurisdictions or that have experienced rapid growth often do not have the time or resources to be sure they are complying with the various tax laws. In addition, most states' statutes and regulations are convoluted and confusing.
As a result, many companies end up having unrecognized Sales & Use Tax registration obligations, significant hidden liabilities, potential Sales Tax refunds, and possible missed savings opportunities due to unrecognized state and local Sales Tax exemptions and/or exclusions.
What’s The Risk? - A Sales Tax Audit!
Audits often bring assessments of tax, penalties, and interest with personal liability!
Plus, if you've never filed and are audited, most states have an unlimited look-back. They can backtrack to your first taxable sale in the state and assess tax, penalties and interest for the entire period. Sales Tax is your customer's obligation. It becomes your expense if it is not properly collected and remitted.
What’s The Benefit?
We can alleviate this burden and possibly save you tax dollars by doing a pre-emptive review of your current compliance functions, with the objective of identifying and resolving any material Sales & Use Tax exposure, identifying states in which the company has a sufficient presence in to be subject to Sales & Use Tax compliance obligations, and evaluating which services and products are subject to Sales or Use Tax. We will compare a given state's requirements with your company's current compliance practice to identify areas of potential Sales & Use Tax exposure, refund opportunities and saving areas due to an unrecognized state exemption or exclusion.
Most penalties are potentially abatable if the taxpayer can demonstrate that the failure to pay or file was due to reasonable cause and not due to willful neglect. Penalties can also often be waived by agreement if the taxpayer voluntarily discloses its liability prior to discovery by the respective taxing authorities.
Additionally, filing a return limits look-back. Benefit now! Evaluate and resolve past liabilities, register and file a return, limit the look-back period, and minimize your future liability.
Caution:
Registering for Sales & Use Tax purposes does not resolve prior liabilities and should only be done after a careful evaluation of your exposure situation and the possible exposure resolution alternatives available to you. This evaluation should be done with the help of a qualified Sales Tax professional. Registering prematurely and indiscriminately can severely limit your options and any positive financial benefits. In fact, it can easily result in negative consequences.
Our professionals can help minimize potential penalties and interest and make sure your company is in compliance with sales and use tax laws. We can also assist in proactively obtaining voluntary disclosure agreements in the event your company has undiscovered sales and use tax liabilities. Voluntary disclosure agreements are an effective way to minimize penalties and interest and can also often limit the look back period. For more information please see the Exposure Resolution section of our website.
Click here for more Sales Tax Tips or visit our website www.oatax.com.
For additional insight on common sales tax concerns, please see the Did You Know? section of our website.
Should you have 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.
* This tip is intended to provide general information only and is not to be considered as a substitute for professional advice.
