Businesses must correctly deal with these sometimes exempt and sometimes subject to sales tax products and services or suffer the consequences. Knowing when tax applies to “sometimes taxable” goods and services is essential to successful tax compliance – but it’s not always so easy to discern.
Use tax, the lesser known counterpart of sales tax, suffers from a basic lack of PR. Buyers and sellers alike pay it no mind. Despite 27 states having a dedicated line item in tax returns for reporting use tax owed, only 2% of taxpayers actually report it. This has left the states with a $23 billion deficit annually in uncollected use tax.
Don’t undervalue transactional tax management in post-merger systems integration. Companies grow in vastly different ways; some focus on organic growth while others expand through strategic mergers or acquisitions.
If South Dakota, Colorado, and Connecticut are any indication, states are starting to publicize common sales tax management errors.