Whether services and products are subject to sales take depends on the state. The landscape of the internet sales tax is in a constant state of change. In 2018, the Supreme Court opened the way for more states to collect sales tax on online sales.
Sales and Use Tax compliance are some of the most significant tasks for CPA firms. Accurate and timely filing is vital to compliance and avoiding potential penalties. We work with clients to help prepare Sales & Use tax forms for every state in the U.S.
Making Sales Tax Compliance accurate, timely and simple
Sales Tax Compliance Outsourcing Services in USA
KMK Ventures assist with
- Preparing forms that define gross sales, taxable sales, and sales liability for every applicable state
- Tax preparation services in USA
- Tracking resale certificates on file and ensuring compliance
- Keep track of supporting schedules that reconcile with the general ledger to avoid any audit problems
- Keep track of sales tax updates that require our clients to collect sales tax from their customer
Sales and Use Tax Outsourcing Services
Sales tax is not a high priority for many businesses. Beyond their field of vision lies compliance challenges that may start small and become expensive and serious. Every time a company introduces a new service of product, sells in a new location, or online to a new site, a remote seller connection may apply to sales tax.
The rules are moving targets. Because federal and state courts took no action, states assumed a presumptive authority that broadens the connection and obligates more out-of-state sellers to charge sales tax.
Affiliate relationships with online sellers that charge sales tax means the shared products or services are taxable. Drop shipping is another complex sales tax management element. In some cases, using a drop shipper or having a contract with a distributor that drop ships is a taxable connection activity.
The various product sales tax rules among the states is probably going to continue, especially in the midst of emerging technology. Product taxability and the rates of sales tax depend on such things as the type of product, the date of sale, its use, and the location of purchase.
Sometimes the ingredients of a product are taxable. To complicate matters further, the traditional definition of a product is changing. With an increase in digital downloads, such as movies and music, some states broadened the definition of taxable products to include virtual products.
Sales of enhancement or modifications to prewritten computer software is generally taxable. There is an exception that requires enhancements and modifications to be stated separately. States approach taxability of services in a variety of ways.
Taxability of a service depends on factors, such as customer location, location of the service, and if a service fits into a particular state’s broad service categories. Installation, repair, fabrication, and personal services fall under taxable parameters.
Some states tax nearly all services, while other tax very few. The professional service category becomes confusing as the mode of delivering service increasingly moves online. Remote IT support is taxable in some states.
A sales tax exemption certificate enables a buyer to make tax-free purchases for items otherwise taxable. They are provided to suppliers to substantiate purchased items meant for resale and exempt from tax.
Other reasons for sales tax exemption include the nature of the services or goods sold. Some states tax labor and service, others do not. There are states that collect sales tax from government agencies and nonprofits, others do not.
The collection and filing of exemption certificates is a burdensome administrative chore, given the conflicting requirements of each state. It is an error-prone aspect of sales tax management that has the potential of leaving a business open to considerable risk and vulnerable to an audit because of an invalid or expired certificate. Disallowed exempt sales are the leading cause of interest, penalties, and fines.
A sales tax compliance plan should include an efficient, accurate, and cost-effective way to manage the challenging environment of sales tax. Collecting, filing, and reporting sales and use taxes is an uphill battle for businesses striving to be accurate.
They need to avoid the practices that put them at risk for an audit, using out-of-date rules and rates, failing to recognize new rules connected to remote sales, and using an error-prone process to manage sales and use tax rates and laws.
Hire remote accounting staff India that ensures there is no over- or underpayment of sales tax. KMK Ventures have software solutions that feature dynamic, on-demand tools. We deliver reports quickly and easily, which improves accuracy and discourages audits.
Businesses enjoy a rapid return on investment with our sales tax compliance solutions. Companies can deploy staff to other revenue-generating activities. The average penalty is $24,000 for an audit that finds errors in sales and use tax. That figure is detrimental to a business. Join other businesses that entrust the KMK Ventures expertise and affordable solutions for sales tax compliance. We
- Prepare standard paper work that defines gross and taxable sales and the tax liability for each state applicable
- Sales tax returns are prepared online and on manual PDF forms
- Track filed resale certificates and ensure compliance
- Keep track of supporting schedules to reconcile with the general ledger, making it ‘audit proof’
- Keep track and inform clients of sales tax updates so that they collect accurate sales tax from customers