Ever-evolving tax laws and regulations are a challenge business owners face on an ongoing basis. It’s crucial to have the proper processes in place to ensure compliance but just like the regulations themselves, your processes will be ongoing and may need to be updated often as well. With a recent wave of updates to sales tax laws in various states, it’s an opportune time to evaluate your tax strategy and tax planning procedures.
The fundamental processes necessary to maintain compliance may vary for your organization but let’s explore some best practices to keep your business on track for success.
Regularly Review and Stay Informed
One of the key methods to remaining compliant is to stay in the know. Set aside time on a monthly basis to review any changes at the state and local levels, ensuring you are aware of any modifications that may affect your business. Some of the best ways to stay informed are by subscribing to reliable tax publications, attending related webinars or seminars, and establishing a relationship with a trusted tax advisor who can provide guidance on changes impacting your business.
Determine Sales Tax Nexus
Sales tax nexus refers to the connection between your business and a particular state that obligates you to collect and remit sales tax. As a business owner, you are responsible for determining if you have sales tax nexus in a given state. This determination is crucial for staying compliant but can be complicated as there are many qualifying factors to consider. Conducting a nexus study and partnering with a sales tax advisor are highly recommended best practices to ensure compliance is maintained.
Maintain Accurate Recordkeeping
Accurate and organized record-keeping is an essential part of running a tax-compliant business. All sales transactions, including invoices and receipts, should be easily accessed through your record-keeping system. The required statute of limitations varies by jurisdiction, so your system should be organized by state and give you a clear overview of your sales tax obligations.
Filing and Reporting
Deadlines and frequency for sales tax obligations can also vary for each jurisdiction. Familiarize yourself with the compliance regulations where you have sales tax nexus and implement a calendar or reminder system to ensure timely filing and reporting for each. You will also want to keep track of any exemptions or credits your organization may qualify for and maintain accurate documentation to support your filings.
Remaining sales tax compliant requires establishing effective processes and staying informed about evolving tax laws. Stay proactive and prioritize compliance to help ensure the long-term success of your business.
Our team of trusted advisors understands the complexities of sales tax compliance and is dedicated to providing comprehensive support.
Whether it’s helping you navigate complex laws, determining your sales tax nexus, offering insights on available incentives, or optimizing your documentation process, we have the expertise to assist you. Together, we can ensure your business remains on the path of compliance while you concentrate on driving forward toward your business goals.
Contact us today to learn more about our tax services and how we can take your sales tax processes to the next level. Let’s have a conversation!