Sales tax compliance is an existential challenge for many businesses in the U.S. But despite the risks sales tax liability poses, most CPAs rarely practice it. In this post, we review how sales tax specialists can help you expand your practice and protect your clients from liability.
Sales tax compliance is extremely complex, making it difficult for most CPAs to add to their practice. They simply don’t have the time or resources to get started and keep up with fast-changing regulations.
But despite the challenges, sales tax compliance services are an essential solution CPAs should be able to provide.
Poor sales tax compliance is one of the biggest risks your clients face. An unexpected audit or latent unpaid liability can suddenly emerge, crushing margins and eating into cash flow.
To combat this, CPAs often work with sales tax specialists to get their clients compliant and protect them from sales tax exposure.
What Is a Sales Tax Specialist?
A sales tax specialist is an accounting firm that solely practices sales and use tax and related taxes at the state and local level. The narrow focus of their practice gives them unmatched expertise in getting businesses compliant and saving them money. A sales tax specialist can handle every sales tax problem your client could face.
By working with a specialist, CPAs can outsource or add to their practice a range of sales tax services, including:
- Nexus reviews
- Voluntary disclosure agreements
- Returns filing
- Automation set up
- Refund reviews
- Due diligence
- Audit defense
Create Better Outcomes for Clients
Every CPA’s goal is to create the best possible outcome for their client. And with countless industries struggling to keep up with the burden of sales tax, it’s likely many of your clients have sales tax liability.
To create the best possible outcomes for their clients, many CPAs are establishing partnerships or referral efforts with sales tax specialists. This better protects clients from liability and can save them hundreds of thousands of dollars.
For example, a specialist can often help you achieve a 5-7 figure reduction in your client’s liability with just nexus and exposure review.
And in the event of a costly state audit, a specialist can be the only thing standing between your client and bankruptcy.
By combining their broad expertise with the extreme focus of a specialist, CPAs can protect clients from sales tax liability and improve outcomes across their practice.
Answer All Your Client’s Questions
Achieving sales tax compliance relies on asking and answering the right questions:
- Where do I have nexus?
- What’s my total liability?
- What exemptions are available to me?
- Can I cancel my state accounts?
- What exceptions should I be aware of?
Accurately answering these questions is essential to protecting clients from the vulnerabilities of sales tax liability. But if you don’t spend every day working with sales tax, these questions are hard to answer.
CPAs that work with sales tax specialists can get quick and accurate answers to any question a client might ask.
That’s because sales tax specialist firms have been living and breathing sales tax for decades. They’ve followed the fallout of South Dakota v Wayfair and the creation of economic nexus religiously. And they’re well-versed in the ways regulations vary state to state.
If you have a question, there’s a good chance they’ve answered it a hundred times this year alone. And if they don’t already have the answer, they know exactly where to find it.
Add Sales Tax Compliance to Your Practice
As CPAs become more aware of their clients’ sales tax compliance needs, many consider adding the service to their practice.
The problem is the world of sales tax is so complex and fast-paced it can feel impossible to get started.
For this reason, many CPAs work with a sales tax specialist. This helps them get up to speed quickly, expand service offerings and better aid clients. It also allows them to develop the expertise they need to offer sales compliance services in-house.
Outsource Sales Tax Compliance
Some CPAs simply don’t have the time or required level of interest to add sales tax to their practice. Despite this, you’ll still need a way to answer the sales tax questions your clients have.
That’s why many firms outsource the work of sales tax compliance to specialists. They’ll stay on top of fast-changing tax laws and Wayfair drama so you don’t have to. This allows your clients to be more successful, while saving you from countless hours buried in state and local tax laws and regulations.
For most CPAs, assisting clients with sales tax compliance is an essential yet daunting task. Partnering with the right consultant can make the process much easier.
Need help with sales tax compliance services? We’re here to help. Fill out our short What’s Next questionnaire to get in touch for a free 45-minute consultation.