Guest post by Jeremiah LaRue of CPA.com
As we approach the four-year anniversary of the South Dakota v. Wayfair ruling, it is safe to say that the state and local sales tax landscape has changed drastically. With Missouri being the final state that administers sales tax to enact its economic nexus legislation, going into effect in 2023, companies doing business across state and local boundaries have been put on high alert.
State and local taxing authorities are aggressively ramping up their audit and enforcement activity seeking to catch businesses who are non-compliant with new and changing tax laws. Businesses as well as their owners can be subject to financial consequences such as paying back the full amount of taxes owed plus interest and penalties. For those found guilty of tax evasion, punitive consequences such as fines or even jail or prison time could be added.
While state and local tax officials debate and refine the definition of economic nexus, taxpayers are left to interpret and comply with new and changing tax rules in the face of a potential audit.
However, you don’t have to go at it alone. There are those who proudly call themselves sales tax advisors (or Sales Tax Nerds!) who are dedicated to serving taxpayers facing challenging and complex scenarios that require a trusted sales tax advisor.
While your CPA firm is a good place to start, it is rare for any one firm to be an expert in all situations for all tax types across all taxing jurisdictions. Sales tax is a specialty area, and issues can run the gamut in complexity and in time it takes to resolve them.
If your company has limited internal capacity for sales tax work (maybe you’re a department of one!) or is in an industry that is particularly nuanced when it comes to sales tax, an advisor who specializes in sales tax can be a trusted ally to step in and provide the strategies necessary to guide you forward.
Various advisory models exist to support you whether you want an expert to advise on the sales tax implications of a new business area, run and execute a project like a tax engine implementation, or manage a fully outsourced function like filing monthly sales tax returns.
For businesses facing sales tax challenges, how might they describe their sales tax advisor?
As the state and local sales tax landscape experiences more changes and added complexity in coming months and years, there is no excuse for ignorance. Given the financial, reputational, and even punitive consequences of non-compliance to sales tax requirements, there should be no hesitancy for companies when it comes to investing in a sales tax advisory relationship. And for sales tax advisors, CPA firms included, given competing priorities and challenges associated with running your own business, there should be no delay in seizing the opportunity to learn from seasoned experts whose experience can inspire your own sales tax advisory services.
Now there isn’t exactly an easy button or a secret formula to solving all your sales tax needs. However, there are several sources where you can find your best advisory match. Numerous individuals representing companies, advisory firms, tech partners, and other industry advocates exist who, through their experiences, have developed a blueprint to a successful sales tax advisory relationship.
For advisors who’d like to learn more about sales tax and building a sales tax practice, visit this page with resources from CPA.com and Sales Tax Institute.