In the increasingly complex world of sales and use taxes, there are many traps for the unwary and the unprepared.
1) NOT MONITORING NEXUS DEVELOPMENTSNexus is the trigger for your company’s state tax compliance obligations. Whether developments in a company’s business activities or developments in nexus laws and policies, many companies often fail to monitor nexus. Recently, a wave of new state economic nexus provisions have entered the nexus arena and we expect more states to follow in the near future. Are you ready? Through a nexus study, BDO can help you navigate traditional physical presence nexus, affiliate nexus, “click-through” nexus, and the recent, controversial wave of economic nexus. If on-line Marketplace sales and related fulfillment activities is causing your nexus, act now and eliminate all historical liabilities in several states through a special disclosure program that ends on October 17, 2017.
Is the audit managing you or are you managing the audit? Effective planning and development and execution of an audit program creates efficiency during the audit process, lowers assessment risk and improves prospective compliance. Leverage the depth of BDO’s experience to assist you with planning for and defending sales and use tax audits and developing an audit program for your sales and use tax function.
2) AUDIT MANAGEMENT (OR MIS-MANAGEMENT)
Businesses are generally aware of their use tax obligations when vendors fail to collect sales tax, but many companies fail to take full advantage of available exemptions or request refunds within the statute of limitations. BDO can perform a Refund Review (or “Reverse Audit”) of your company’s sales and use tax records, focusing on situations in which you overpaid tax and file refund claims to recover the taxes. Such review can be performed at any time, but is particularly appropriate at the time of a state audit.
3) FAILING TO RECOVER USE TAX OVERPAYMENTS
Have you taken BDO’s Sales and Use Tax Process and Controls Survey and measured your company’s process and controls against best practices (access the survey below)?
4) ASSESSMENT OF SALES AND USE TAX PROCESS & CONTROLS
Still unsure how your sales and use tax function measures up to compliance obligations? With a one to two day Diagnostic Review, BDO can review your sales and use tax process and controls and provide findings and recommendations to guide your next steps toward ensuring substantive compliance.