In a time where cash flow is more important than ever, companies are looking for opportunities to find money left on the table. One way to do this is by understanding your tax liability and obligation when it comes to sales and use tax. We’ve talked about how contractors can avoid overpaying sales and use tax, but what if it’s too late? How do you know if you overpaid, and how can you recoup that money to increase cash flow?
How do I know if I overpaid sales and use tax?
The rules around sales and use tax are complicated and vary by state. State statutes and interpretations are changing constantly, causing businesses to sometimes pay more than necessary just to be compliant. When working on tax-exempt projects, if there isn’t a dedicated team identifying tax incentives, sometimes sales and use tax can be paid unnecessarily without knowing it. A professional sales and use tax review can help identify the exact amount you owe for certain projects and if you are eligible for any refund caused by overpaying.
What is a sales and use tax review?
Sales and use tax reviews provide companies with a benchmark of their current sales and use tax underpayment and overpayment status, as well as associated planning opportunities. These reviews identify where the company potentially overpaid sales and use tax, often times on items applied to tax-exempt projects.
How do contractors benefit from sales and use tax reviews?
General contractors and subcontractors performing work in multiple states typically fall victim to overpaying sales and use tax, sometimes to the tune of six-figures. There’s a big opportunity for contractors who work on tax-exempt construction projects such as schools, government buildings, hospitals, and municipalities. Sometimes these types of projects don’t have the time or resources to stay on top of applicable tax incentives and compliance, so that’s where a sales and use tax review can come into play after the project.
Missouri statutorily has extended the sales and use tax refund review to a 10-year window from its traditional 3-years. As a result, refunds are typically being identified on projects over seven additional years, extrapolating the total refund considerably.
How can I get started with a sales and use tax review?
Anders has State and Local Tax advisors that specialize in performing sales and use tax reviews, making the process seamless. Our sales and use tax reviews are performed on a contingency fee basis, meaning there are no fees unless a refund is identified and collected. A percentage is paid only if we find a refund. Learn more about Sales and Use Tax Reviews or contact an Anders advisor below to find out if a sales and use tax review would benefit you.All Insights