At first glance, managing sales tax responsibilities on your own may seem pretty simple. You step into the world of a sales tax manager with the utmost confidence. But once you get into the nitty gritty of the job you begin to realize you may be in way over your head.
You may be relieved to know you don’t have to deal with the ins and outs of sales tax alone. When hiring a sales tax professional, you are outsourcing many crucial responsibilities. Here are the top 7 crucial responsibilities that you outsource when you utilize a sales tax professional.
1- Ensure compliance with state and local sales and use tax laws and regulations
Staying up to date on the ever-changing laws, rules and regulations is crucial to keep your business compliant. A sales tax manager will know the time frames around staying compliant. They must monitor any changes in state rules regarding nexus, taxability and collecting and remitting payment responsibility. They must stay up to date in all registrations and renewals as business grows.
2- Apply sales tax rules and regulations accurately
Knowing sales tax laws is one thing; applying them correctly is another. Sales tax managers must be thoroughly knowledgeable in the rules and regulations so they can correctly apply these rules to their clients' businesses.
3- Monitor and understand how business growth can change tax obligations.
Just as sales tax laws evolve, so do businesses' growth and sales tax obligations. As a business grows, the number of employees, locations, warehouses and inventory grow. Each of these can shift the tides of nexus.
4-Manage tax calendars, notices and due dates. Watch closely for changes.
Managing notices is crucial when it comes to maintaining compliance. They can come in the form of an online platform or they can be mailed. Keeping up with tax calendars is also pertinent to follow due dates. These due dates are known to change often so they must be monitored. Failing to do so can result in penalties and fines.
5- Respond promptly to notices and changes
Responding to these notices is important. Oftentimes, an action or change that needs to be put into practice is brought to light. Sometimes past mistakes come up through notices and these mistakes need to be mitigated promptly.
6- Identify and mitigate past mistakes through refund reviews.
A refund review may be known as a recovery project, sales tax recovery project, audit recovery or a reverse audit. Overall, they all mean essentially the same thing: Reviewing transactions – specifically expense purchases and fixed asset acquisitions – for tax that was paid that should not have been.
It is a process conducted by sales tax professionals who review all business purchases to tell you where you are paying taxes, what you are paying taxes on and why you are paying them. Throughout this project they are able to see if you are subjected to any tax exemptions.
7- Manage the liability of filing returns accurately and on time.
A sales tax manager must ensure all returns are filed and payments are made by the correct due date and in the correct way to remain compliant. Failing to do so can result in considerable fines and penalties.
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