Podcast: Assessing Your Sales Tax Landscape

In this episode of Weaver: Beyond the Numbers, our hosts dive into the complexities of financial and tax issues. Shane Stewart sits down with Steven Scarborough to discuss how businesses can effectively assess their sales tax landscape. Whether you’re expanding into new states or need to clean up past liabilities, this conversation offers practical advice on navigating tax obligations, ensuring compliance and avoiding potential penalties.

Key Points:

• Assessing sales tax obligations requires a clear understanding of your business’ nexus with each state.
• Nexus timing is critical; liabilities can accumulate if you’ve been operating without proper filings.
• Automating tax calculations and establishing proper systems can simplify compliance across multiple jurisdictions.

Stewart and Scarborough explore the critical steps businesses should take when evaluating their sales tax landscape. Scarborough emphasizes the importance of understanding where a company has nexus — essentially, the connection to a state that triggers a tax filing obligation. He explains that businesses often fall into three categories: those trying to manage their taxes proactively, those that have unknowingly accrued liabilities and those scrambling to fix past oversights. For each, the key is to determine where they should be filing and what they owe.

“When you’ve identified where you need to file and your tax liability, it’s important to weigh your options — whether that’s registering immediately or looking at a voluntary disclosure program to reduce penalties and interest on back taxes,” Scarborough said. He explained that larger organizations with widespread sales often need tax engines integrated into their systems for real-time tax calculations, while smaller firms can typically manage with their existing ERP system and manually entering rates.

Scarborough brings the focus to taxes due on business purchases, revealing another possible area of financial exposure. He advocates for establishing procedures to actively review vendor invoices and ensure the correct application of use tax. Armed with these insights, they can understand, ascertain and manage sales tax obligations more comprehensively.

Subscribe and listen to future episodes of Weaver: Beyond the Numbers, on Apple Podcasts or Spotify.

©2024