Seven Benefits of Sales Tax Compliance Outsourcing

There are a variety of reasons it makes sense for companies to look for assistance with sales tax compliance outsourcing. Fast growth which makes keeping up with ongoing compliance requirements a challenge, turnover in key positions or an unfavorable audit experience resulting in significant liabilities are a few of the possible reasons we have heard from our clients. Regardless of the reason, many companies are making the decision to look for outside assistance with their sales tax compliance. Below are the seven benefits cited most frequently by our sales tax compliance outsourcing clients when asked about their experience:

1. Focus in-house efforts on higher leverage initiatives
Sales tax compliance is the monthly treadmill that continues on in perpetuity. It can consume up to two weeks of an in-house staff’s time each month. Without the ongoing burden of sales tax compliance in-house staff and management can instead spend their time and resources working on more complex issues, revenue generating projects or proactive tax planning – activities which directly contribute to improved bottom line results.

2. Reduce costs
Cost reduction is an issue at the forefront of all well-run companies’ collective minds. Savings can come in a number of forms such as reduction in staffing and overhead, elimination of sales tax compliance training after turnover, and elimination of payment errors and late filing penalties to name a few.

3. Streamline the sales tax compliance process
Companies who have made the transition to outsourced sales tax compliance have been shocked at the ease and simplicity of the new process in comparison to performing this function in-house. Companies can merely provide the data and allow your sales tax consulting firm’s experts to take it from there. A number of our clients have even taken the additional step to set us up with remote access enabling us to pull the necessary data ourselves. By selecting the right sales tax consulting firm as your partner your company’s sales tax compliance function can transition from a burden to a breeze.

4. Improve accuracy and consistency
Returns will be filed with accuracy with all the right figures getting into all the right fields on each return. Has the tax rate for a jurisdiction you report to changed? That’s a worry you’ll no longer have. Your sales tax compliance outsourcing partner should provide you with a clear audit trail including quick and easy access to all sales tax returns, payment vouchers, backup work papers and other important documents related to your sales tax compliance.

5. Know with certainty that all filing deadlines will be met
Returns will be filed on time. Some states such as Florida require tax returns to be filed prior the 20th of each month, which means when that date falls over a weekend or a national banking holiday that taxpayers must file early. The state of Washington requires monthly filers to submit their sales and use tax returns by the 25th day of each month while quarterly filers are required to submit their returns by the 30th day. These are all headaches which are eliminated with outsourced sales tax compliance.

6. Minimize sales tax audit risk
Returns filed correctly and on time will result in fewer state sales tax audits because incorrectly or late filed returns are red flags to state and local taxing authorities. In the unfortunate event you are audited, have confidence that you have built-in complementary audit support as part of the sales tax compliance outsourcing agreement you have in place with your partner sales tax consulting firm.

7. Leverage your sales tax consulting firm’s experience
Sales tax compliance is often merely the “tip of the iceberg” of the services provided by sales tax consulting firms. Nexus determinations, sales tax research, audit defense and representation, sales tax reverse audits and recovery reviews, and registering in new states or local home rule jurisdictions are just some other sales tax services that robust sales tax consulting firms offer. Working with an experienced, tax professional means that they will know the answers to your sales tax compliance questions.

Have a question? Contact Aaron Giles

Your comments are welcome!

Aaron C. Giles is the Founder and President of Agile Consulting Group. Aaron spent five years working within the specialty niche of Sales & Use Tax at Brown & Associates before forming his own firm in 2005. He has worked hundreds of audits in states all across the U.S. during that time and has delivered savings of over $75M in the form of refunds and credits to his clients. Today, he leads a group of talented, detail-oriented colleagues who focus exclusively on Sales & Use Tax.

Some of our firms’ greatest achievements have come in successfully arguing new and unique perspectives to existing tax law in various states enabling our clients to claim exemptions on categories of purchases previously held to be taxable. Included in these victories are: communication services taxes for religious nonprofit hospitals in FL, bulk purchases of drugs in VA, specific surgical tools and instruments for healthcare providers in TX, printing plates in GA, railroad utilities in KY, and most recently software in AL.

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