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Tag Archive for Diane Yetter

7 Ways You Can Take Control of a Sales Tax Audit

TaxConnections Blogger Diane Yetter posts about sales tax auditsIt’s a fact of life that no one looks forward to being audited.  Undergoing an audit can be a scary proposition.  But just because your company is being audited, that doesn’t mean that you can’t take control of the situation and play a part in determining how the audit will progress.  One of the first steps in a sales tax audit is the opening conference with the auditor.  This is one of your first and best opportunities to take control of the audit and set the tone for how it will progress.  Here we’ll outline seven ways that you can set the ground rules for a sales tax audit during this opening conference.

1. Use a sign-in and sign-out sheet.  You’ll want to monitor the activities of the auditor.  Using a sign-in and sign-out sheet helps you to track the comings and goings of the auditor and ensure that they have left the premises.  And it is likely your company wants to know who is on the premises so use this as the explanation why it is required.

2. Only have one contact person.  Pick one person in your company through which all communications will take place with the auditor.  This ensures that potentially sensitive information won’t be leaked accidentally to the auditor by other employees.

3. Request the specific information needed to track a transaction. If the auditor is examining a transaction, ask the auditor for what specific records are needed for the questionable transaction.  This way you are providing the Read more

How to Speak the Language of Sales Tax and Value Added Tax

TaxConnections Blogger Diane Yetter posts about Value Added Taxes Both Sales Tax and Value Added Tax (VAT) can present a number of challenges to tax practitioners who are well versed in one, but not the other. To begin, the basic structures of how sales tax and VAT are imposed are largely different. But once you delve a little further into each one, you may notice that the terminology used looks foreign and unfamiliar. Sales tax and VAT have different terms for essentially similar concepts, but sometimes the concepts themselves are handled altogether differently. We’ll take a look at some of the language and terms used in sales tax and VAT, how they’re similar and what makes them different.

Nexus vs. Permanent Establishment

In the U.S., nexus is the basic concept of whether a company has sufficient presence in a state which then requires them to collect sales or use tax.  Nexus refers to links, connections, or contacts between a political jurisdiction and a taxpayer. If a taxpayer has sufficient nexus with a state, it is deemed to be “doing business” in that state and will be liable for the state taxes.  In VAT countries, a permanent establishment for VAT purposes is a factual inquiry.  It could include: having a facility located in the country, bookkeeping facilities located in the country, and the ability to Read more