Accounting firms and sales and use tax advising: Perfect together?
In our blog last week, we looked at how sales and use tax advisory services might be a good new...
The US has some of the most complex sales tax laws in the world. And for some business accustomed to working outside the US, each individual state can be seen s a country – each with its own rules and regulations.
Understand where you have nexus and where your products/services are considered taxable.
You get us the data, we handle the rest. We manage the filing and remittance of tax, state registrations, jurisdictional correspondence and more!
We align each of our clients with a dedicated practitioner to provide ongoing support. We focus on service first.
Nexus is the connection you have between a state or local taxing jurisdiction. Without nexus, you have no sales tax obligation. Nexus is determined by either a physical or economic presence. Unless you have an office, employees or a warehouse in the US (although there are other forms of physical presence that should be considered), you’ll mainly be working with economic nexus.
Ever since economic nexus was enacted in 2018, states have been changing their thresholds and how to qualify. When you work with TaxConnex, we can help you identify where you have nexus and help you monitor your footprint going forward.
Once you’ve determined nexus, you need to determine if your products and/or services are taxable. For some, this is an easy answer. But for many industries, the answer is not so straightforward. Just like with nexus, states differ in their taxability laws.
TaxConnex can perform a taxability review to help you understand where your products or services are taxable and help you manage this as your business grows (expansion into new states, changing laws, new product launches and mergers or acquisitions).
Determining the most effective international sales tax calculation process needs to consider many variables: where you have nexus, the complexity of the taxability of your products/services, whether your invoices are recurring to the same customers each month, and the capabilities and limitations of your invoicing system. Some businesses can manage the calculation of sales tax without separate sales tax software systems. Other businesses will benefit from a tax rate-only solution, while other more complex taxing schemes will require sales tax software. TaxConnex can help you determine which option is best for you.
Calculating international sales tax is only part of the challenge. How do you build a process to file the returns and remit payment? Filing and remittance solutions will need to accommodate multiple data files and formats, e-file and paper returns, electronic payments and checks, notice management and resolution, tax calendar updates, and an audit trail to minimize penalty assessments.
If you haven’t been collecting and remitting international sales tax but you now have nexus and taxable sales, you could have some prior period exposure. The longer you’ve neglected your obligation, the larger the amount owed (and penalties and fees) will be. But, there are options.
TaxConnex can help you calculate your prior period exposure and guide you to make the right decision in how to mitigate your exposure and create a process to move forward in compliance.
"TaxConnex will register companies in different states for us. They'll handle the returns for us. They handle the payments for us, they will handle the notices. So it's a complete package as far as I'm concerned."