Tax Process Consulting Corner
Top 10 frequently asked tax process questions.
March 27, 2008
Sponsored by Vertex Consulting
Tax professionals today can at times struggle or be too busy to identify the gaps and flaws in their various tax processes. A tax process review performed by an experienced consulting firm can provide management with a definitive tool that documents their current processes, provides recommended solutions for any identified inefficiencies and leads to direct tax saving ideas. This article outlines frequently asked questions that can assist you in evaluating your business needs.
What Is a Sales and Use Tax Process Review and Why Does My Company Need One?
A Sales and Use Tax Process Review is a high level assessment of your company's sales and use tax processes and taxability decision making process. Typically a consulting group will come onsite to your company and interview personnel to gather information that aids in the strategic assessment of your company's tax processes and the potential use of sales/use tax returns technology. These onsite interviews ensure that future system implementation and integration work is optimized by working with the most up to date tax information available for your business. A Tax Process Review can be a selling point to management for the need to implement a sales and use tax calculation product.
What Benefits Do I Receive From a Tax Process Review?
A tax process review will provide your company with a report that contains flow charts and narratives that document the specific steps of your company's tax processes. The report identifies inefficiencies within your tax processes and provides potential solutions. The documentation that results from a tax process review may provide a basis for compliance with Sarbanes-Oxley 404 controls (along with your own internal documentation) and can provide new staff members with your department's tax processes.
What Is a Sales/Use Tax Matrix and Does My Company Need One?
A sales/use tax matrix is a tool that can be used to determine the taxability of the products and/or services that your company sells or purchases. A tax matrix will provide specific taxation advisement relating to your company's products and services in every taxing jurisdiction where business is conducted. Therefore the matrix provides your company with a document that supports the taxation of all your transactions. An ideal tax matrix will provide a regulatory citation supporting the taxability determination for each transaction included in the matrix.
All the Products and Services That My Company Sells Are Taxable. Why Do I Need a Tax Matrix?
Although all the products and services your company sells may be subject to sales tax, your customers could be exempt from sales tax collection. Utilizing a tax matrix that identifies specific customer types that may be considered exempt such as federal, state and local governments, not-for-profit organizations, Indian reservations, etc. would allow your company to accurately apply sales tax and manage exemption certificates effectively. The accurate application of sales tax could also lower your overall pricing making your company more competitive in the marketplace.
How Will We Maintain Our Tax Matrixes on an On-Going Basis So That We Are Assured That Sales Tax Law Changes in the Various States Will Be Captured by Our Organization So That the Proper Tax Will Be Applied in the Future?
Tax matrixes can be maintained by internal staff or by a third-party consultant. Ideally the matrixes would be maintained by the creator of the matrix and most tax consultants will provide this service. The maintenance process requires a constant review of changing tax laws, providing the basis for updates to the matrix.
Does My Company Need to Collect Sales Tax for States Where We Are Not Registered?
To view the entire list of Top 10 Frequently Asked Tax Process Questions, view the full article at: vertexinc.com/AICPA.
About Vertex Consulting
Vertex Consulting is an experienced staff of dedicated tax technologists, researchers, and project management professionals. Over 500 clients in all major industries across both North America and Europe have increased the value their tax departments add to their organizations by partnering with Vertex Consulting to implement tax and tax technology best practices.
Since Vertex does not provide external auditing, there are no Sarbanes-Oxley restrictions or conflicts of interest on tax consultation with clients. This allows Vertex Consulting to combine recognized industry expertise in both tax and technology to provide clients with a single point of contact for their tax technology needs.