Reasons To Get Sales and Use Tax Help
Whether you know precisely what you need or are just feeling overwhelmed and do not know where to begin, we are here to help. While the need possibilities are endless, the following are some common scenarios in which it may make sense to get professional assistance:
You are undergoing a sale and use tax audit: Sales and tax audits can be very costly, especially if you are not represented by someone who is highly experienced in handling such audits and who has a solid understanding of the applicable tax laws and your rights as a taxpayer.
You are buying, selling or merging a business: Most jurisdictions hold purchasers of companies liable for prior period sales tax liabilities of the predecessor. As a buyer, it is important to uncover any potential sales and use liabilities of the target and hold the seller financially responsible for them. As a seller, it is important to ensure that the buyer’s sales tax exposure estimates and related demands are reasonable and that steps are taken to legally minimize the amount needed to settle your liabilities.
You need help determining where you should be collecting sales and use tax: Not collecting sales tax reduces compliance costs and can result in a competitive advantage but those advantages will quickly be reversed by costly audit assessments if it is later determined that a collection responsibility existed. We can help you identify the jurisdictions in which potential exposure exists, help you properly weigh the risks of non-compliance and help you get into compliance going forward while minimizing prior liabilities, if any.
You need help resolving prior period sales and use tax liabilities: We recommend a prioritized approach to resolving prior period liabilities and utilizing different approaches for different jurisdictions depending on specific case factors -- such as the dollar amount involved, availability of formal exposure resolution programs (e.g., voluntary disclosure, amnesty, etc.), ongoing exposure risk, existence and strength of alternative tax positions, the desire of the client, etc. Many jurisdictions are willing to enter into agreements with undisclosed taxpayers pursuant to which, previously undetected liabilities can be disclosed in exchange for a limited lookback period and abatement of penalties. Some jurisdictions may also agree to a partial or full abatement of interest. In a best-case scenario, a jurisdiction will agree to forgive all prior period tax liabilities with the taxpayer agreeing to comply going forward.
You need help identifying sales and use tax overpayments and securing refunds: This service is typically involves a detailed review of purchase transactions to identify sales and use tax erroneously paid to vendors and/or self-assessed and paid directly to the corresponding taxing jurisdiction. Before filing a refund claim, it is important to also assess the extent to which there may also be underpayment exposure, as filing a large refund claim often triggers an audit. While a taxpayer is undergoing an audit is typically an ideal time to file an offsetting refund claim. In that case, the auditor will already be in the process of identifying underpayment exposure and refund claims submitted usually get processed faster.
You need help determining the taxability of products and services that you sell or purchase: On the sales side, it typically makes sense to err on the side of collecting sales and use taxes since the burden is on the customer rather than the seller, but it is essential from a customer relations perspective that taxes reflected on their invoices be justifiable based on the applicable laws. It is also important to be prepared to justify to an auditor any decisions not to charge tax. Sales and use taxes paid on purchases are directly borne by the purchaser and there is financial incentive to err on the side of not paying tax. However, it is important to be prepared to demonstrate to an auditor a good faith effort to pay the proper amount of taxes due and that any decisions not to pay tax were based on reasonable interpretations of applicable laws. We can prepare a custom-tailored taxability matrix showing recommended taxability decisions by product/service and jurisdiction that cites applicable statutes and includes explanatory footnotes.
You need help determining the sales and use tax treatment of a large dollar transaction or high impact issue: We can perform a detailed review of the issue and prepare an opinion letter, which includes a detailed description of the relevant facts, the issues in question, conclusions, and a detailed discussion of the analysis supporting the conclusions. If a transaction has not occurred yet, there may also be opportunities to structure the transaction in a manner that legally eliminates or reduces the tax.
You want to get a binding opinion from a taxing jurisdiction regarding a specific sales and use tax question: We can prepare and submit a letter-ruling request to the corresponding taxing jurisdiction on your behalf. If a favorable ruling is received, auditors from the jurisdiction will be required to honor it. Such rulings are only binding with respect to the taxpayer to whom they were issued. Prior to submitting a ruling, it is important to evaluate the probability of obtaining a favorable ruling. An unfavorable ruling will substantially weaken the taxpayer's potential to benefit from a more favorable position on future audits.
You have a sales and use tax concern that does not fall into one of the above-listed categories: There can be countless other reasons to reach out to Goldfine. If the issue is important to you, let's discuss it. We can help.