Services | TAX
STATE AND LOCAL TAX (SALT)
When looking to drive more value out of your tax function, you need to take a closer look at your sales and use tax processes and procedures. According to one study, approximately 20% of the state and local business taxes paid are for sales and use taxes compared to approximately 10% for state income taxes (Total State and Local Business Taxes, COST and Ernst & Young LLP, July 2011).
Regardless of this fact, the amount of resources allocated to managing the sales and use tax function are often significantly lower than those dedicated to state income taxes, which are low to begin with! This mismatch of resources often results in both huge opportunities as well as material risk.
When done correctly, the cost associated with the collection and remittance of sales taxes should be limited to the cost of compliance. After all, the sales tax burden should be one that's borne by your customers. However, in reality, the lack of technical expertise, resources, and/or sub-optimal processes and procedures shifts that tax burden from your customers to you, often resulting in a significant hit to your bottom line.
On the use tax side, are you confident that you're paying the right amount of sales taxes on the assets and supplies that you use in your business? How do you know? At OUM, we can help you answer these questions and more. Our goal is to help ensure that you are taking advantage of various incentives and other opportunities to reduce your sales and use tax burden to the minimal required amount.
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