FAQ
Frequently Asked Questions
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FAQs
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What Services Does Sales Tax Helper Offer?Sales Tax Helper provides sales tax services for businesses. We represent businesses during sales tax audits, appeal audit assessments and represent businesses against state agencies in administrative and tax court. We also provide general sales tax consulting, nexus studies, and voluntary disclosure services.
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How Does Sales Tax Helper Charge for Its Services?Sales Tax Helper operates on a transparent, fixed-fee model, when possible. For more custom projects, we typically provide fixed fee and hourly options. This allows us to offer cost-effective solutions without the need for expensive sales tax lawyers on retainer.
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Why Choose Sales Tax Consultants Over Tax Attorneys?Sales Tax Helper employs attorneys, CPAs, former state auditors, and seasoned consultants who can efficiently handle sales tax audit representation, sales tax appeals, consulting services providing a cost-effective alternative to traditional tax attorneys.
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What Triggers a Sales Tax Audit?Sales tax audits can be triggered by random selection, targeting of specific industries suspected of underreporting, discrepancies in reported sales, high volumes of exempt sales, or prior audit history. States are more equipped than ever with third party data from various sources. Typically, if the state already has certain data and you turn over additional and unnecessary documentation, it will only increase the assessment.
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What Should Businesses Do Upon Receiving a Sales Tax Audit Notice?Upon receiving an audit notice, it's crucial to organize records, perform a pre audit to review for underreported sales and exempt sales documentation, avoid waiving the pre-audit grace period, and consider hiring a sales tax audit consultant to manage the process and communicate with auditors.
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How Long Does a Sales Tax Audit Typically Take?The duration of a sales tax audit varies, ranging from 6-12 months and, in some cases, extending to a few years, depending on factors like the company's size, documentation organization, and business complexity.
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What are Common Challenges Faced During Sales Tax Audit Resolution?
Challenges include dealing with one-sided auditor findings, deciding whether to hire a professional for assistance, managing tight deadlines for protests or appeals, and addressing factual or legal issues in the auditor's assessment.
The number one issue in a business handling their own audit is giving the auditor access to its accounting system and overproviding unnecessary documentation. It is critical to know why the auditor is requesting certain information and the outcome of providing certain information. Unfortunately, many companies turn over documentation that shows sales tax collected and not remitted, which can turn a normally civil case into a criminal one.
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How Can Businesses Effectively Challenge a Sales Tax Assessment?Effective strategies include sending protests to the correct state office within the allowed timeframe, preparing organized documentation to resolve factual discrepancies, and understanding the legal intricacies of sales tax laws. While the audit phase can typically be resolved on the documentation or the facts, challenging a sales tax assessment can open the door for legal arguments as well.
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Is Hiring a Sales Tax Professional Advisable for an Audit Resolution?In many cases, hiring a sales tax professional is beneficial for navigating the complexities of audit resolution, especially when legal or technical issues are involved. Sales Tax Helper offers expertise in these areas without the high costs associated with traditional tax lawyers. It is critical to know the law relating to a specific business in a specific state, understand what documents to provide and which to not provide, as well as being certain to not turn over documentation that shows tax collected and not remitted as there can be criminal implications.
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What is the Importance of Pre-Audit Planning?Pre-audit planning involves organizing records and understanding the potential areas of focus during the audit. It's important not to waive the pre-audit grace period and to prepare for the auditor's inquiries.
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How Does Sales Tax Helper Handle Audits for Out-of-State Companies?
Most contemporary audits are done electronically as opposed to in person. Sales Tax Helper handles audits for businesses in every jurisdiction irrespective of whether we have a location in the state conducting the audit or where the business is located.
Further, Sales Tax Helper can manage audits for companies located outside the auditing state, addressing the complexities arising from different state tax laws and interstate commerce regulations.
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What is the Cost Implication of a State Sales Tax Audit?The cost of a state sales tax audit can be significant, with professional fees, tax payments, penalties, and future compliance expenses. Further, handling an audit internally can be very time-consuming process to learn and understand the procedure and regularly communicate with the auditor. Professional guidance can mitigate these costs and allow you to focus on the business, while we focus on the audit.
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How Should Businesses Respond to the Sales Tax Audit Notice?A measured response to the audit notice, possibly involving a sales tax audit professional, is recommended. It is critical to understand why the question is being asked or the documentation requested. Before providing the information, it is important to understand the result of providing it. Sales Tax Helper advises against volunteering too much information and suggests strategic communication with auditors. Unfortunately, many companies turn over documentation that shows sales tax collected and not remitted, which can turn a normally civil case into a criminal one.
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What Factors Affect the Duration of a Sales Tax Audit?Factors like the size and complexity of the business, organization of documentation, and the sophistication level of the business operations can significantly impact the audit's duration.
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How Does Sales Tax Helper Approach Sales Tax Audit Resolution?Sales Tax Helper challenges assessments by focusing on factual accuracy, legal interpretations, and technicalities. Audits can be resolved by understanding the facts and the audit procedure as well as taking advantage of the law. As such, our team has former state auditors and CPAs that understand the audits and attorneys to focus on legal interpretations. The aim is to minimize the financial impact on the business while ensuring compliance.
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What are the Steps in Challenging a Sales Tax Audit Assessment?
The process includes sending a timely protest or appeal, reviewing factual issues in the audit, developing legal arguments, and sometimes leveraging technicalities in the audit process.
After the protest or appeal is filed, typically a conference is conducted with the state’s personnel to discuss the case. It is appropriate at this stage to provide any factual or legal arguments as well as discuss practical resolutions to the case with the agency.
If the case cannot be resolved at the intra-agency level, it can be further challenged in tax or administrative court. At this stage, the case is typically discussed with a lawyer from the state from a factual and legal perspective. Because hazards of litigation can be considered, many more cases get resolved at this level than the lower levels. Of course, if the case cannot be resolved, it proceeds to hearing/trial, so it is important to have a sales tax attorney or seasoned sales tax professional to handle the matter as the administrative court process closely mimics traditional court.
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What Expertise Does Sales Tax Helper Bring to Sales Tax Issues?The team consists of former auditors, accountants, CPAs, and experienced sales tax attorneys, offering extensive experience in handling sales tax issues across various states.
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When is Hiring a Sales Tax Lawyer Necessary?Sales Tax Helper suggests that most sales tax issues do not require a state-licensed tax attorney. A qualified representative with sales tax expertise is often sufficient for effective representation. Our team of lawyers, CPAs, and former state auditors are typically qualified to handle the matter from consulting through the audit, to the appeal and in administrative or tax court.
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Can Sales Tax Helper Assist with Multi-State Sales Tax Issues?Yes, Sales Tax Helper is equipped to handle sales tax issues involving multiple states, leveraging their expertise in different state tax laws and regulations. Our nationwide experience also gives us an advantage to see how similar issues are resolved in other states and trends throughout the country.
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What Sets Sales Tax Helper Apart from Traditional Tax Lawyers?All we do is sales tax. Most tax lawyer do federal IRS matters and a few sales tax cases. Our team only focuses on sales tax, and we handle hundreds of cases each year. Sales Tax Helper offers specialized knowledge in state sales tax laws and issues, providing services at a fraction of the cost of traditional tax lawyers who may not have the same depth of expertise in sales tax.
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What Strategies Does Sales Tax Helper Use in Sales Tax Litigation?Sales Tax Helper employs a variety of strategies in litigation, including challenging the facts, the law, and technicalities of sales tax assessments, ensuring a comprehensive defense. We also offer unique administrative law expertise which can create additional opportunities for your business to save money.
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How Does Sales Tax Helper Help in Appealing a Sales Tax Assessment?The company assists in filing timely appeals, reviewing the auditor's findings, and providing representation in administrative or tax court, if necessary. Sales Tax Helper works with the business to formulate a strategy, files the appeal itself, handles any hearings during the appeal with the state and works with the client to negotiate and resolve the company’s sales tax problem.
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What Are the Risks of Not Responding to a Sales Tax Audit Notice Timely?Failing to respond within the allotted deadline can limit or extinguish the right to contest the assessment, leading to enforced collection measures by the state. States can file liens, freeze bank accounts, and even file criminal charges in an effort to collect unpaid sales tax.
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Can Sales Tax Helper Assist with Sales Tax Compliance and Planning?Yes, Sales Tax Helper offers consulting services to help businesses with sales tax compliance, planning, and understanding complex sales tax laws.
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How Can Sales Tax Helper Assist with Multi-State Sales Tax Audits?As a nationwide company, Sales Tax Helper often represents a business with audits in multiple states. This allows Sales Tax Helper to develop a global strategy rather than a reactive one, which may reduce the liability in one state but increase it in another. The company has expertise in handling sales tax issues across multiple states, offering guidance on state-specific laws and regulations, and representing businesses in audits conducted by various state agencies.
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What Should Businesses Know About Sales Tax Exemptions?Understanding and properly documenting sales tax exemptions is crucial. Sales Tax Helper can assist businesses in ensuring they meet the legal requirements for claiming exemptions. Sales Tax Helper can also assist a business by requesting an anonymous letter ruling from the state, which can confirm or reject an exempt sales position.
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How Does Sales Tax Helper Manage Communication with State Auditors?Sales Tax Helper acts as a liaison between the business and the state auditor, managing all communication to ensure consistency and strategic representation. Because Sales Tax Helper has former auditors on its team, it can effectively communicate with the state’s auditors to get issues and audits resolved.
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What is the Role of a Sales Tax Audit Consultant in the Audit Process?A sales tax audit consultant organizes and reviews financial records, communicates with auditors, and develops strategies to minimize sales tax liabilities and disputes during the audit.
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What are Common Mistakes Businesses Make During Sales Tax Audits?
Common mistakes include poor record keeping, misunderstanding sales tax laws, not responding appropriately to audit notices, and failing to seek professional advice when necessary.
The most common mistake is not understanding what to provide and what not to provide. Providing overinclusive documentation or unfettered access to the company’s accounting system can lead to large assessments and even criminal liability.
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How Does Sales Tax Helper Navigate Complex Sales Tax Laws for Different Industries?Sale Tax Helper’s team has decades of experience and has handled thousands of sales tax audits. The team has handled audits in just about every industry in most states. With expertise in various industries, Sales Tax Helper can navigate complex sales tax laws, identify areas of risk, and provide tailored advice for industry-specific sales tax issues.
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What are the Benefits of Hiring Sales Tax Helper for Sales Tax Disputes?Hiring Sales Tax Helper can save time and money, reduce stress, and increase the chances of a favorable outcome in sales tax disputes, thanks to their specialized expertise and experience. While Sales Tax Helper handles the audit, the business or the business owner can focus on their business.
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What are a Sales and Use Tax Audit, and What is the State’s Goal in Conducting One?A sale and use tax audit aims to verify that a company has correctly collected and remitted sales tax from customers and paid the appropriate amount of sales/use tax on purchases, including capital assets and operating expenses.
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Does a State Have the Right to Come to Our Location and View Our Records?Most audits are done remotely with electronic records. In unique circumstances the auditor can come to the business to inspect the operation. However, in most cases, the audit is handled remotely and done at the state’s office or at one of Sales Tax Helper’s locations.
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Who Conducts a State Sales and Use Tax Audit?These audits are conducted by an auditor on behalf of a state revenue agency, and, in some states, local municipalities.
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What Should I Do If I Received a Call from the Auditor Instead of a Letter?Always request a formal letter from the taxing authority outlining the audit period and legal entity to be audited if contacted by phone. It is usually advisable to refrain from answering any questions or volunteering information if called.
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What are the Most Common Mistakes or Issues Companies Face in a State Tax Audit?The most common mistakes are underreported sales, undocumented exempt sales and tax collected not remitted. Most issues are compounded by turning over unnecessary information to the state auditors. There are usually issues on undocumented purchases without paying sales tax, although the exposure tends to be significantly less than sales issues. Common mistakes include poor management of the process and timing, failure to identify technical issues or overpayments, poor record keeping and data quality, and limiting access to information.
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How Can I Find Help for My Company with a Sales and Use Tax Audit?It's beneficial to partner with a firm experienced in managing auditor visits, audit processes, data flow, deadlines, and responding to auditor questions.
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What is Sales Tax Nexus?Sales tax nexus occurs when a business has a connection to a state, either through physical presence or economic connection, requiring the collection and remittance of sales tax in those states.
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How Does Storing Inventory in an Amazon Warehouse Impact Sales Tax Compliance?Most states take the position that storing inventory in an Amazon fulfillment center creates sales tax nexus, obliging businesses to collect sales tax from buyers in that state, though marketplaces like Amazon may collect on behalf of sellers.
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How Do I Determine What I Am Selling is Taxable? What’s the Correct Sales Tax Rate?Product taxability laws vary by state, and sales tax rates differ based on location. Tangible personal property is generally taxable, but some items like groceries and medicine may be exempt or taxed at a lower rate. Services are generally exempt, but many are taxable on a state-by-state basis.
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What are the State Sales Tax Requirements When Shipping to Customers?The taxability of shipping charges varies by state. Many states offer exemptions for services such as shipping, so long as certain requirements as met. States often consider factors such as whether the shipping is separately stated, the item being sold is taxable and whether the shipping charge is passed through or marked up.
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What are the Sales Tax Responsibilities of International Sellers in the U.S.?International sellers with physical or economic nexus in U.S. states are required to collect sales tax and must register with the necessary states to be compliant.
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When Should You Register for a Sales Tax Permit?Businesses should register for a sales tax permit when they are based in a state, have a physical presence, or have economic nexus in a state.
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What are the Biggest Audit Triggers?Major triggers include significant product announcements, revenue discrepancies, previous audits, misleading statements about registration, and major business changes like acquisitions or funding rounds. States have been getting better at receiving and automating audits using third party data such as purchase records, 1099-k reports, and federal income tax returns.
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Who are Sales Tax Helper's Ideal Clients?Sales Tax Helper caters to businesses seeking assistance with voluntary disclosures, sales tax audits, appeals, litigation, and consulting. They are likely best suited for companies that have received a notice of audit from state revenue agencies and need expert help in handling the audit and potential subsequent appeals or court proceedings.
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What Types of Sales Tax Issues Does Sales Tax Helper Specialize In?They specialize in voluntary disclosures, sales tax audits, challenging assessments, sales tax litigation, and sales tax consulting. Their services include handling voluntary disclosures, the audit process on behalf of businesses, fighting assessments, and representing businesses in administrative or tax court.
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What is the Process for Starting Services with Sales Tax Helper?To get the process started, the client should provide the most recent correspondence received from the state, if applicable. Sales Tax Helper uses that to confirm its scope of work and generate its initial paperwork, which includes an engagement letter and power of attorney (s). The engagement letter is a simple contract between Sales Tax Helper and the client. The Power of Attorney forms are state provided forms, prepared by Sales Tax Helper and executed by the Client, which allows Sales Tax Helper to discuss the case with the state. Upon execution of the paperwork and payment, Sales Tax Helper begins work.
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Does Sales Tax Helper Work with International Clients?Yes, international clients that make sales into the US can be subject to US sales tax. Sales Tax Helper can assist the international client with its US sales tax issues.
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What is the Minimum Business Size or Revenue for Sales Tax Helper’s Services?We assist companies of all sizes from mom and pops to public companies and everything in between. Businesses with larger sales revenue typically have more sales tax exposure but there are nonfinancial reasons for small companies to engage Sales Tax Helper as well.
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Does Sales Tax Helper Handle IRS or Federal Income Tax Issues?Sales Tax Helper only handles sales tax issues against the states. Sales Tax Helper does not handle IRS issues but can refer the issue to our network of IRS professionals.
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Are Services Provided for Personal Income Tax or Other Non-Business Taxes?Sales Tax Helper only handles sales tax issues against the states. Sales Tax Helper does not handle income tax or other non-business taxes but can refer the issue to our network of IRS professionals.
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Can Sales Tax Helper Assist with Payroll Taxes or Employment-Related Taxes?Sales Tax Helper only handles sales tax issues against the states. Sales Tax Helper does not handle income tax or other non-business taxes but can refer the issue to our network of IRS professionals.
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Do We Offer Tax Services for Sectors Other than Sales Tax?Sales Tax Helper only handles sales tax issues against the states. Sales Tax Helper does not handle income tax or other non-business taxes but can refer the issue to our network of IRS professionals.
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