Everyone knows that there will be penalties if sales and use tax is not correctly addressed. A colleague asked if we ever heard of anyone going to jail because of sales and use tax compliance issues. The answer is no. We have not run into that. But there is a myriad of things that the taxing authority can do to collect sales and use tax that is owed.

While most business owners know the importance of understanding their sales and use tax responsibilities in the jurisdiction where they first start their business, it is important to remember to focus on the various sales and use tax laws when making sales into different jurisdictions.

We are excited to announce the creation of a quiz to help you address the question of whether you should register to collect sales and use tax. It is five questions that can help you start asking the right questions about your sales and use tax compliance responsibilities and whether your company may have a sales and use tax registration requirement in more than one jurisdiction. We hope you enjoy the quiz!

We are going to discuss charging your customer sales tax after the sales transaction has been completed. What should you do if you discover (usually in a sales tax audit) that you didn’t; charge sales tax on a taxable transaction or you did not charge the correct sales tax.

As your business changes or expands, or you make large purchases, interim reviews can help ensure that you are sales and use tax compliant. Once you determine that you owe additional tax or that you should charge sales tax on sales, you can make a plan to address the issue.

Every jurisdiction has sales and use tax exemptions available to certain taxpayers. Some exemptions are related to exempt organizations (i.e., who is purchasing the item), while others are based on what is being sold and /or how it is being used.

When most people think of reconciliations, they focus on bank statement reconciliations. While they are important, if you are ever audited, one of the first things that the auditor will do is reconcile your sales tax accrual account.

Auditors routinely request bank statements as part of their document request.
If you are commingling personal deposits and business deposits, you must be able to identify and substantiate which deposits are not related to your sales.

Sales tax credits can are either valid or they are not.  Period.  What is an unapproved sales tax credit?  How does this topic impact the compilation of a correct sales and use tax return?  Can you say “TROUBLE?”

If you are a contractor or subcontractor with construction projects in Texas, there are several factors that you must determine to understand your sales and use tax responsibilities. One of these factors is contract type.