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With the
complexity and volume of taxing entities; the number of statutes and
regulations that exist within each most companies are erroneously
paying sales and/or self-assessing use tax where they are not
required. Many times the error may come down to it simply being the
rate of tax that is applied. Unfortunately, the combination of
complexity and volume create the situation where many of these
mistakes are made. The simple fact is that many consumers assume
that the suppliers from which they purchase have the correct systems
in place to know the proper application of sales tax and vice versa
the supplier assumes the same in reverse. It is an unfortunate
situation for the taxpayer but for many state and local governments
it becomes a windfall in additional tax revenues.
Sales and Use
Taxes are commonly referred to as a “Gray Tax.” The simple reason
for that is that the purchase of a similar product or service may
have a completely different tax application depending upon its use
or where it is used. This is the responsibility of the purchaser to
provide the supplier with the proper exemption certificate to ensure
that they are afforded the benefit of the tax exemption.
Unfortunately, this is the step that is many times overlooked by the
purchaser in that each person/department involved in processing the
transaction assume that the other is ensuring the proper application
of tax has been taken.
BCCG's team of tax
professionals will perform a detailed review of your organization's
invoiced sales & use taxes and the processes associated with such to
identify the existence of sales & use tax refunds, recover those
refunds and ensure that your staff is educated and provided with a
system in which to follow to ensure that these errors do not happen
in the future and to assist them in identifying other types of
purchases to question in the future.
Our
sales & use tax process will include our team performing a detailed
review of the following to identify opportunities for refunds/cost
saving:
Ø Overview
of business and its operations to assist in identifying possible
exemptions
Ø Initial
on-sight review of accounts payable files including invoices,
purchase orders and other backup documentation, as well as accounts
payable policies and procedures (including exemption forms on file)
relating to sales and use taxes.
Ø Review
previous state and local sales & use tax returns
Ø Review
previous state and local sales & use tax audits (if any within the
last few years)
Ø Prepare
preliminary findings report – discuss report and agree to next steps
with client.
Ø Identify
past exemptions and other possible exemptions to utilize for future
purchases
Ø Identify
and introduce areas for improvement to both process and controls
Ø Preparation
and submission of refund claims and resolution of such claims
directly with suppliers and/or taxing authorities
Ø Negotiate
and secure refunds and/or credits/reductions
Ø Ensure
that proper and updated exemption certificates are on file with
appropriate suppliers and accounts payable and purchasing
departments are provided with an up-to-date list of each.
Ø A
detailed training seminar focused on the clients’ respective
busines(s) and the refunds/exemptions identified to assist client in
reducing future sales & use tax overpayments.
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