Sales and use tax compliance requires a business to prepare, file, and pay taxes to each jurisdiction, with monthly, quarterly or annual filings. A business must consider the product and service being sold, the tax rate where the customer is receiving the product and service, the terms of the contracts, and the invoices. Additionally, proper compliance needs to consider the location of the customer to insure whether the transaction is taxable in that jurisdiction, what the proper rate of tax is for the locality and what is the proper jurisdiction in which to report the sale.
Taxability Matrices Study
Generally, the sale of tangible personal property and enumerated services are subject to sales tax in 45 states and the District of Columbia which impose sales tax, unless the Seller obtains a valid exemption certificate covering the sale. For sales of offerings which combine tangible property, intangible property and services, the taxability may be complicated in which case the Taxpayer may need a qualified sales tax professional to build a sales tax matrix. The tax professional will consider the statutes, regulations, case law, letter rulings and other guidance in determining taxability. As part of the review, the tax professional will read representative contracts, statements of work, and invoices and discuss with management. At the end, a sales tax matrix will be produced that can be used then by either individuals or a tax engine to properly determine which sales or portion of the sales should be subjected to tax. We have the sales tax expertise to build sales tax matrices for you.
If you are interested in pursuing a sales tax matrix, then click on the link to book an appointment or to send an email. We look forward to serving you and your clients.
Tax Engine Mapping
Sales tax engines are great tools for sales and use tax compliance. However, the mapping of revenue accounts to sales tax engines requires sales tax expertise since an improperly mapped revenue account to a tax engine will not charge tax when it should. The tax professional needs to fully understand the products and services being offered at the same level that is needed for preparing a sales tax matrix. This is why a proper due diligence should not stop when they learn that a Target has a sales tax engine, but the tax professional should ask who mapped it and review the mapping to make sure it looks appropriate. Otherwise, the Target could have a sales tax exposure that will only be discovered under audit. We understand the mapping of revenue accounts to sales tax engines and have the sales tax expertise to map the revenue accounts to the sales tax engine.
If you are interested in pursuing tax engine mapping, then click on the link to book an appointment or to send an email. We look forward to serving you and your clients.
Tax Notice Management
States periodically send notices for income tax/non-resident withholding tax filings as well as for sales and use tax filings. These notices can involve underpayments, overpayments, missing information, incorrect filings, state corrections on filings, or many other matters. If a company fails to properly respond to notices, then the state can issue assessments which can turn into liens. Our experienced state tax professionals can look at the notice and figure out what is needed and how it should be handled. If you need broader management of such notices, we can set up a system of logging the notices, advising on recommend action, tracking the activity and making sure they are managed properly. Our team has deep experience with both state income tax, non-resident withholding tax, and sales and use tax.
Audit Defense
States periodically audit for sales and use tax as well as income tax and non-resident withholding tax. Our team has years of experience managing complex tax audits, whether you need someone to help defend positions on nexus or handle complex issues on taxability for sales and use tax. Our team will work with the auditor and your team to minimize any liability. Whether we need to challenge nexus, sourcing of sales, taxability of revenue, or mitigation of sales tax assessments through XYZ letters, we are prepared to help you reduce the assessments. Our team has deep experience with both state income tax, non-resident withholding tax, and sales and use tax.
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At Insight Tax Advisors, we understand that tax related matters can have a significant, and often confusing, impact on a pending transaction. Our dedicated team of tax experts is here to help you find the solutions you need. Whether you are buying or selling, or even just contemplating a long-term exit strategy, we have you covered.
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