You already know the saying, ‘There are two certainties in life: death and taxes’… We haven’t solved eternal life yet, but RKL professionals know a thing or two about taxes. Undoubtedly, one of these tax scenarios applies to you: you incur use tax on purchases, you distribute goods or services, or you are exempt from collecting or paying taxes. As a result, every company and organization, regardless of industry, size or complexity, has a tax problem.
Taxes remain a compliance risk that government audits target annually as they search for new ways to increase revenue sources. Coupled with the fact that goods and services taxation processes are complex and dynamic, it becomes nearly impossible for customers to navigate tax issues manually on their own. RKL has tax planning experts that help business finance teams identify tax savings opportunities, ensure compliance and resolve tax controversies.
“Use tax” and “sales tax” are commonly combined and mistaken as being the same. Businesses that operate in a state with sales and use taxes need to understand the differences.
3 Common Types of Taxes Businesses Have a Problem Tracking
1. Sales Tax
States and local governments frequently change taxability rules, rates, and jurisdiction boundaries with little notice. On top of that, establishing economic NEXUS and sales tax NEXUS requires an expert who knows intrastate and interstate sales thresholds and regulations. Our team can help you determine NEXUS and automate your tax calculations, collections, and reporting compliance with audit protection for your organization.
Read this blog to get our latest insights into recent NEXUS regulations and triggers.
2. Consumer Use Tax
Use tax is a tax on taxable goods and services that are consumed, stored, or used in the jurisdiction and haven’t already been subject to sales tax. In this tax scenario, it is the buyer’s responsibility to recognize the use tax and calculate, report, and remit payment to tax authorities. An automated solution can help with the early detection of vendor errors, reduce your financial team’s burden of manual calculations and tracking, protect against overpayment of taxes owed, and streamline audits through database controls.
3. Exempt Certificates Management
Managing tax-exempt certificates requires a disciplined methodology. Without an automated solution to collect, store, and manage expiration dates, customers rely on manual processes riddled with opportunities for error. Precise exempt certificates ensure that nontax situations are captured and recorded correctly, protecting you and your trading partners from avoidable penalties for missing or expired certificates.
Not all tax scenarios require an automated solution. Our team of tax professionals can help you understand then document your individual tax situations, risks and estimated non-compliant penalties, if any. RKL will help you manage tax compliance every step of the way.
