One of the scariest aspects of State and Local Tax (after learning about nexus, taxability, and potential exposure) is getting compliant.
Nobody wants to come out of pocket for sales tax they didn’t collect when they didn’t understand the requirement they had to collect tax. In fact, we call that the “Biggest Tragedy in Sales Tax.” Sales tax is a margin killer, because it’s imposed on top of the sales amount, and if not collected and comes out of your own pocket, then it will surely work against any profit margin you have on your business operations. And, to rub SALT in the wound (punny?) it often comes with penalties and interest! Our number one goal is always to help you become compliant while mitigating your potential liability.
The two most common remedies for becoming compliant is to register for a sales tax permit and begin collecting tax on your taxable sales or to participate in a Voluntary Disclosure Program by entering into a Voluntary Disclosure Agreement (VDA) with the state. VDAs are done on an anonymous basis and are usually recommended when the potential exposure is material in nature, as there are benefits that may limit how far back a state will look for uncollected taxes, reduce or waive the penalty, and/or reduce or waive the interest. Occasionally, a state or local jurisdiction may provide an amnesty program, and it’s benefits outweigh the VDA benefits. But, don’t be fooled, not all amnesties are alike, and there have been some we would NOT recommend!
We can help you determine whether you should register or enter into VDAs if you have nexus and aren’t yet compliant. We provide all the details, and put you in the driver’s seat on deciding the remedy. We do this state by state… you’ll be surprised how confident you feel after we talk. Once the decision is made, you can relax, and we take care of the rest.