sales and use tax red flags: understanding audit tactics to drive compliance
DESCRIPTION
Despite the potential consequences of non-compliance with dynamic sales tax related laws and regulations companies often still fail to give sales and use tax their due. The best way to manage your sales and use taxes successfully and avoid a bad audit is to understand the red flags that auditors are trained to find. What's obvious to state Department of Revenue (DOR) auditors might go unnoticed by your accounting team. If you know what they're looking for, you can correct your strategies before they get costly. Join us as renowned State and Local Tax expert Judy Vorndran, CPA, JD, who has seen it all in this realm by working with companies from all industries.TRANSCRIPT
- 1. Ask, Share, Learn Within the Largest Community of Corporate Finance ProfessionalsSales and Use Tax Red Flags:Understanding Audit Tactics toDrive Compliance
2. Learning ObjectivesAfter attending this event you will be able to: Understand how your company can remove or avoidcommon red flags relative to sales and use tax whichsignal non-compliance Learn how to work more effectively with stateDepartment of Revenue auditors Understand how to determine where nexus exists foryour company 3. Welcome to ProformativeProformative is the leading educational resource forcorporate finance professionals.A resource where corporate finance and relatedprofessionals advance in their careers through: Uniquely valuable, online peer network On demand courses taught by peers and SMEs Valuable Features and ResourcesCheck it out at www.proformative.com 4. Ask, Share, Learn Within the Largest Community of Corporate Finance ProfessionalsSales and Use Tax Red Flags: UnderstandingAudit Tactics to Drive ComplianceJudy Vorndran, CPA, JD, State and Local Tax Partner, EideBailly LLPDavid H. Casper, CPA, State and Local Tax Consultant, EideBailly LLP 5. Sales Tax vs. Use TaxPay me now or Pay me laterSales Tax = Pay me now at purchaseUse Tax = Pay me later when it is usedWhen to pay Use tax? When items purchased were taxfree and used / consumed in the state. 6. Sales Tax vs. Use Tax (cont.)Take this average pen.Use Tax was due whenthey removed the penfrom inventory.Sales Tax was due whenthe pen was bought fromthe office supply store.Photo courtesy of morgueFile 7. Use Tax ExamplesCommon use tax examples Item purchased out of state Online purchases Purchased from private party Many other scenarios applyPhoto courtesy of morgueFile 8. NexusNexus is a term used to describe a substantial connectionbetween a business and a taxing jurisdictionCommon Factors that create Nexus are: Property located in the state Performing services in the state Personal delivery of property into the state Popcorn nexus Revenues associated with a state 9. Two Types of NexusPhysical Nexus Associated with sales and income taxes A result of property or activity in a stateEconomic Nexus Currently associated with income taxes A result of money earned or spent in a state 10. Nexus ComparisonPhysical nexus Created through property or physical activity in astate Usually creates a payroll, sales, income andproperty tax filing requirement depending on thefactsEconomic nexus Associated with revenue Economic activity in a state do you sell to ourtaxpayers? 11. Physical NexusCommon causes of physical nexus? In person sales of services or goods Repairs, installations, services or technical assistance Resolving customer complaints Delivery of goods by employee Maintaining a showroom Real or tangible property in a state 12. Sales and Use Tax Red Flags: UnderstandingAudit Tactics to Drive ComplianceThank you for your interest in this presentation.View the on-demand webinar or download the fullpresentation at:www.Proformative.com