Podcast: State and Local Tax Issues and Refund Opportunities for Financial Institutions

On the latest episode of Weaver: Beyond the Numbers, host James Mihills, partner, Risk Advisory Services at Weaver engages in a comprehensive discussion. The conversation centers around financial institutions, the tax issues they face, and how to maximize tax savings with Shane Stewart, partner-in-charge, State and Local Tax Services at Weaver, and Blake Fuqua, partner, State and Local Tax Services at Weaver.

Key Points:

  • Property taxes can be a major expense for banks, especially with the increasing use of technology.
  • Financial institutions should consider new construction-related exemptions for sales tax when expanding their operations or building new locations. Conversely, they should also ensure that contractors are charging sales tax for remodeling services, as these are often considered taxable.
  • Partnering with a state and local tax practice like Weaver's can help banks effectively manage compliance, reduce overpayment risk, handle complex filings, ensure timely payments and provide peace of mind through compliance evaluations and other specialized services.


What do financial institutions need to know about state and local taxes issues, and where are they potentially leaving money on the table?

Many financial institutions don’t realize they need to register or review purchase invoices for sales tax, but improper payment of sales tax can have a detrimental impact on these organizations. Property taxes are another significant expense for entities, but there are several ways to cut the costs of this expense and maximize tax savings if done correctly.

This conversation also touches on:

  1. Revelations that many financial institutions are overpaying sales tax on IT-related and professional services as technology investments grow
  2. The significance of property taxes, the value attached to brick-and-mortar bank locations and the potential tax savings through correct valuations
  3. The administrative burden of ensuring tax compliance, the risks of overpayment and underpayment and the idea of potentially outsourcing these complexities

Fuqua explained, “A lot of banks are overpaying sales tax on a lot of IT-related services, data processing, and professional services. There are some recent court cases in the state of Texas and a few other states that really sets some good opportunities available for these financial institutions and banks to take advantage of. So, it’s definitely something financial institutions and banks should consider as they increase their operational footprint and spend.”

Stewart later added, “One rendition that you’re reporting property on could be associated with five different property tax bills, right? And so, just managing the compliance around meeting those requirements each year is a huge task administratively, and it’s quite a burden. So you think of the expense — the amount of time and resources it takes to handle this…”

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