State & Local Tax Blog

Sales Tax Consultation: 4 Obvious Reasons to Do One (and 1 Not-So-Obvious)

Getting sales tax compliant is a daunting task for most businesses. The best place to start is a free sales tax consultation.

A sales tax consultation is a phone call with an expert who specializes in the sales tax issues you’re trying to address. The goal is to discover the details of your company, answer any questions you have and address specific issues you’re dealing with. Then your expert will provide recommendations and next steps on getting compliant.

Sales tax consultations can go in a number of different directions, but there are a few common things to expect – and knowing them will help prepare you ahead of time.

Reason #1: You’ll Get Free Advice, Not a Sales Call

When you have a sales tax question or issue, you want to talk to a sales tax expert, not a sales rep. That’s why a sales tax consultation is a free call with an expert whose goal is to provide guidance, whether or not they have a service to offer you.

At the end of the consultation, you’ll receive a recommendation for next steps to get compliant. And you might find out your situation is okay, and you don’t need sales tax services. Since there’s no obligation, there’s no reason not to get on the phone.

 Reason #2: You’ll Get Answers to These Questions

Where Do You Have Nexus?

The only way to address your liability is to know precisely what the total exposure was. And to know that, you have to identify where you have sales tax nexus. Nexus is a link or connection to a state that allows that state to impose a sales tax responsibility upon you. During the consultation, you’ll work with the expert to conduct a nexus review by looking at every state you have sales to see if you meet either criteria.

After the nexus review, you’ll have a good estimate of your nexus footprint and in which states you have a responsibility to collect tax.

Is What You Sell Taxable?

After conducting a nexus review, you’ll then look at the products your business sells and evaluate if any of the items are taxable.

There’s a good chance you’ll find exemptions and non-taxable sales that will reduce your liability. You can also look for sales that are wholesale, making a lot of transactions tax-free with the right certificates in place.

Are Your Sales Channels Taxable?

After a taxability review, you’ll identify sales channels where your business wasn’t actually responsible for collecting the tax.

On every taxable transaction, someone is liable for collecting and remitting sales tax. In states with marketplace facilitator laws, facilitators like Amazon and Walmart are responsible for collecting sales tax on every transaction. During the call, the consultant will work with you to identify marketplace transactions where you can shift tax liability to marketplace facilitators. This process can greatly reduce your total exposure.

Reason #3: You’ll Get Ahead of Issues

The landscape of sales tax compliance changes fast. Tax laws are notoriously cryptic and niche. And unless it’s your full-time job, it’s nearly impossible to keep up with the new regulations and policies and how they affect your business. Because of this, it’s often worthwhile to talk with an expert who can get you up to date on the issues. So, if you have a sales tax question, the fastest way to get an answer is to get on the phone with an expert.

Reason #4: You’ll Get Peace of Mind

Sales tax compliance is not a minor issue. It’s an existential challenge that faces thousands of businesses. Anxiety, fear and insomnia are all common symptoms of businesses owners facing significant sales tax exposure. And the costliest mistake you can make is to ignore the situation.

A consultation with a specialist is the first step towards attacking the problem before it’s too late. This will give you peace of mind knowing you’re on the path to compliance.

Reason #5: Your CPA is Welcome Too

Sales tax compliance is extremely complex, making it difficult for most CPAs to offer the service in their own practice. They simply don’t have the time or resources to get started and keep up with fast-changing regulations.

But despite these challenges, it is very much possible for CPAs to provide sales tax compliance services. Indeed, CPAs can use sales tax specialists to answer their clients’ questions and protect them from sales tax exposure. So, if you’re a CPA with sales tax questions, a free consultation is a great place to start.

Conclusion

For any business looking to get compliant, the best path forward is to confront your potential tax exposure as soon as possible. While this may appear daunting, it’s as simple as setting up one phone call.

 

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