Sales & Use Tax Compliance- Do Your Reconciliations!

by | Mar 7, 2022 | Audits, Sales Tax Returns, Stephanie's Wisdom, Uncategorized | 0 comments

In this video, we discuss the importance of reconciliations, including reconciling your sales tax accrual account.

Key Takeaways:

  • if there are significant differences between what was reported on your sales tax return and the sales tax accrual account, document why there are differences and adjustments.
  • Document differences due to bad debts, credit memos, exports, returns, etc. 
  • Address the timely filer discounts
  • Document adjustments in real time

More Tips in The Sales Tax Sisters Academy

Our mission to provide a resource so business owners, accountants and bookkeepers can understand sales & use tax compliance. We know that sales and use tax laws are not the easiest to understand. Our focus is on empowering you with a framework and general understanding, so you know what questions to ask and where to go to get the information you need to stay on the right side of sales and use tax compliance.

More Tips in The Sales Tax Sisters Academy

Our mission to provide a resource so business owners, accountants and bookkeepers can understand sales & use tax compliance. We know that sales and use tax laws are not the easiest to understand. Our focus is on empowering you with a framework and general understanding, so you know what questions to ask and where to go to get the information you need to stay on the right side of sales and use tax compliance.

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Recovering Sales Tax From Customers

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.

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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.

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Sales Tax Exemptions Explained!

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.

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Do Your Sales Tax Accrual Account Reconciliations!

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.

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The Dangers of Combining Sales & Non-Sales Related Deposits

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.

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Beware: 4 Things about Sales Tax Returns and Unapproved Sales Tax Credits

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?”

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Texas Sales Tax & Construction – Understanding Contract Types!

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.

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Sales Tax Nexus- What Sales Tax Registration Means

Sales tax registration may lead to other registration responsibilities. It is important to not only know when sales and use tax nexus is triggered but to also know that registering to collect sales tax may lead to other registration requirements.

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