Scary Sales Tax Notices That Can Hurt Business
by Gwen Rivera
As a business owner, you know the value of being prepared and delivering on time. In the sales tax compliance world, responsiveness is just as important to prevent major repercussions and an audit.
In Texas, one company was shut down due to an error that resulted in a notice. The notice was not responded to promptly enough, so the state pulled their business license and refused to allow them to do business. The main office had no idea there was an outstanding notice—they discovered it when they were notified of the shut-down. Several stressful days later, they had an employee in the state of Texas hand carry the check to the Department of Revenue to remove the business block.
Responding to notices in a timely fashion is critical to ensuring that your sales tax liabilities are paid promptly and correctly. Notice management is a time-intensive part of sales tax compliance that can eat up your tax department’s resources.
In Missouri, a large hospitality firm received a single notice for one month and one return. The notice itself filled a case-sized box! The total liability: 10 cents. The business offered to come down and pay cash, but the state wouldn’t accept cash. It also wouldn’t accept an overpayment in order to allow the business to write a check for $50 with the remaining amount left on account as a credit. The discussion of payment and reading the full notice cost more than the liability!
Think you don’t need to file once you’ve registered? In Arkansas, if the state shows that your business has not filed a return, they send an estimated assessment. Unfortunately, they use an average tax due which means Walmart’s average tax due is also included in that average. A small company that generally only owes $100 a month in tax may get an assessment as large as $150,000 for tax due!
Businesses must pay special attention to ensuring sales tax compliance; they can no longer afford to not. With new nexus laws that broaden the reach to remote sellers for collection and remittance of sales tax and Congressional bills being considered to manage Internet sales tax issues at the federal level, businesses today need to be proactive to make their processes compliant and easy to manage.
Thankfully, technology has a solution. Microsoft Dynamics has a seamlessly integrated sales tax solution that provides your company with accurate sales tax calculation, intelligent customer exemption certificate management and timely filing and remittance of liabilities as well as notice management (to prevent scary stories like the ones above).
Automating these processes reduces your risk, increases the amount of time your teams have to work on income-producing projects, improves customer relationships and best of all—provides an affordable solution!
Download your FREE copy of Avalara’s “Sales Tax Survival Guide” to learn about the challenges of sales tax compliance and how to navigate the risks associated with sales tax collection, then contact your Summit Group Software representative today! Download now < https://www.avalara.com/Media/DownloadDocs/Whitepapers/survivalguide_2011?blgr942>.
