States are becoming ever more diligent in tracking down organizations that haven’t collected and remitted appropriate sales and use taxes. That only makes sense, since this represents a significant source of revenue for most of them. However, it’s a highly complex issue, given the many thousands of different tax rates in the U.S., what each state considers taxable, and the complex questions surrounding nexus.
In this month’s Insider, we offer some resources to help you unravel the mysteries of sales and use tax, which may help you avoid the consequences of noncompliance
This month’s question:
Have you ever had a sales and use tax audit, or do you know of someone who has? If so, what are your takeaways? Can you share any pointers?
Streamlining the Process
Collecting and remitting sales and use taxes had (have?) grown increasingly difficult over the years. But when the complexities of internet sales and nexus significantly compounded the problem, an organization was formed to streamline matters.
Sales Tax vs. Use Tax
If sales tax hasn’t been paid on something taxable, it then becomes use tax and the responsibility of the buyer to calculate and remit it. This can be tricky business, resulting in fines and penalties for noncompliant organizations.
FREE WEBINAR: Nexus Implications for Procurement Process
It has been five years since the landmark U.S. Supreme Court decision of South Dakota v. Wayfair. This decision changed what activities create nexus for out of state businesses from strictly a physical presence standard to now include economic presence. Join this session to hear the latest on the state nexus rules as well as what types of purchases may be subject to use tax due to the broad nexus footprint of your company.
How Much Do You Know?
With thousands of taxing jurisdictions in the U.S., you probably already know that sales and use tax is complex. But how much do you actually know about the topic? Take IOFM’s quick quiz to test your knowledge and gain some insights.
TAKE THE QUIZ