If you are like most businesses, your energy is spent on product, inventory, employees and trends in your industry. Sales and Local Tax (SALT) is not one of the items that is top of your mind. Most business owners believe they are in compliance with SALT laws and regulations. It is usually not until the notice about the dreaded audit by the Department of Revenue that they find out differently.
If a company is not in compliance with SALT laws, findings from the audit can result in a hefty drain on cash. But interestingly enough, sometimes that dreaded audit turns out to be good news as companies pay taxes in error and have substantial unfiled refunds to be claimed. Both underpayment and overpayment can adversely affect the cash position of a company.
SALT is continually changing due to new laws, new cases and new interpretations, and increasingly difficult to understand, with states taking a much more hands-on approach with stricter compliance measures. By engaging a sales tax review on your company, you can identify potential exposure you may have in the SALT area, and correct underpayment or file to get refunds for taxes paid in error.
If you are the owner of a company that is being audited, be sure to obtain appropriate representation. Representation can substantially reduce audit findings. Implementing proper internal controls can also ensure you are in compliance with the law.
For more information on a SALT review, audit representation or an internal controls assessment, contact you Anders advisor.
