Sales Tax Audit Management

Management: Taxpayers are often burdened with time consuming state sales and use tax audits. You may not have the time or staff to review the proposed audit assessment as thoroughly as possible. Meridian is available to assist you with any state sales and use tax audit issues; past, present, or future.

Meridian’s audit service is designed to provide you with an alternative to managing your state sales and use tax audits. Our methodology for managing a sales and use tax audit is customized to our client depending upon circumstances and situations. Your company deserves to pay only the legal minimum sales/use taxes due. Meridian can assist you in reaching this goal.

Meridian can manage the audit from inception through the audit’s conclusion. We work interactively with the auditor throughout the audit process. This includes such activities as meeting with the auditor on a regular basis, providing the auditor with appropriate documentation, addressing the application of various rules of law as they may apply to your business, and lastly, overseeing the activity of the auditor to ensure that the audit is brought to a swift and satisfactory conclusion.

Defense: Meridian will review all audit assessments and will advise you of any changes or recommendations which would result in an assessment reduction. This is accomplished by reviewing the auditor’s workpapers to identify items that should not be included in the audit sample due to exemptions or discrepancies. The audit can also be reduced by searching for additional credits through an overpayment review that can be used to offset liabilities. We will provide all necessary documentation to the state auditor in support of proposed assessment reductions.

Meridian’s contingency fee based audit service agreements provides you with the option of having us review the preliminary audit workpapers prior to your review or after you have reviewed them. Separate distinct contingency fees are established for each situation. You determine the fees that best suit your company and situation.
 

Sales and Use Tax Overpayment Review

Overpayment: Sales and use taxes are often the largest taxes paid by businesses due to the variety and volume of transactions subject to these taxes. The complex statutes governing these taxes vary from state to state. Meridian’s expertise allows us to determine taxability, identify and recover overpayments of taxes, identify underpayments and establish tax minimization procedures for future transactions. Our consultants conduct a multiphase study to determine and recommend tax recovery for sales & use taxes.

Overpayment reviews can directly affect the bottom line while also allowing our clients to gain visibility and control over their taxability process. Meridian results allow our clients to update and correct tax matrices as well as gain better compliance with multiple jurisdictions. The value of this service is different than typical reviews in that we will be providing you more than just refunds. This thorough analysis will help your organization implement a more efficient process that includes more accurate tax determinations and calculations. We understand this must all be accomplished with minimal disruption to the various departments and their staffs.

The most challenging task with overpayment reviews is working with a large volume of purchase records. However, through our data manipulation process, we are able to target vendors and issues with pinpoint accuracy. Using stratification and sampling methods, we are able to streamline a normally voluminous project for our discovery process. By boring down through the detail we are able to expand our findings upward through the volumes of invoices. Errors in the purchasing process are typically isolated incidences of human error circumventing existing controls. In today’s competitive economy change is inevitable. Change however creates opportunity for errors, especially where there is employee turnover, system change, mergers, acquisitions, etc.

Meridian will review sales tax paid on invoice to vendors and use tax accrued and remitted to the taxing jurisdictions. Our expertise allows us to determine taxability, identify and recover overpayments of taxes, and establish tax minimization procedures for future transactions. Taxing authorities typically do not disclose any overpayments made.

We conduct a thorough examination of your records to identify sales and use tax refunds and credits, prepare the necessary documentation to substantiate the refund claims, and manage all communication with the taxing jurisdictions. We follow up with respective taxing jurisdictions and applicable vendors to recover and collect overpaid tax refunds and credits. We then assist with implementing procedures to reduce future overpayment including training, software implementation, and taxability determination.

Sales and Use Tax Compliance

Returns and Remittances: For many companies, sales and use tax is viewed as an administrative and resource burden. However, simply categorizing the execution of this responsibility as a clerical function can often lead to significant financial consequences. So how do companies strike a balance? One solution would be to outsource the function to tax professionals with experience and the appropriate resources. In fact, it is cheaper and more efficient to outsource these functions than to manage them internally. Sales and use tax compliance is a time sensitive function with state mandated filing requirements and deadlines. Sales and Use Tax compliance can cause a department’s staff to spend countless hours and resources analyzing records, obtaining clarification on issues, and interpreting laws and regulations. The reality of the matter is that most companies do not have the personnel who have both the expertise and the time to effectively manage sales and use tax compliance. The primary objective of outsourcing sales and use tax compliance is return preparation and tax bill processing.

The comprehensive service Meridian offers that differentiates us from our competitors incorporates return preparation and tax bill processing, as well as, the management of all the administrative peripherals. This administrative burden is usually not met by our competitors and results in the client maintaining staff/resources to handle the various state and local inquiries, notices and correspondence. In some outsourcing arrangements tax departments found that they still handled an inordinate amount of the work. All the questions and problems still came to tax. That is precisely why Meridian is in business. We handle it all from notices to reconciliations to returns to payments. Companies that outsource their sales and use tax compliance find that they are able to re-allocate those resources that were once consumed in the compliance process to more value added projects that directly improve the bottom line.

At Meridian our compliance services, along with our other offerings, are scalable to meet your needs.

Sales and Use Tax Consulting Services

Nexus: Meridian can assist in the analysis of operations to determine which states nexus has been established according to state and local specific laws and regulations. Meridian can then determine whether or not your company is registered and compliant in all taxing jurisdictions that it should be.

Registration: Sales and use tax registrations are mandatory for most businesses, whether you are a sole proprietor or incorporated. Tax registrations may be required in many states before you can even start conducting business. Many business owners find locating these registration applications for their business overwhelming, time consuming, and complicated. Meridian offers research and filing services to meet your specific registration needs. Meridian offers business registration services that include filing and payment of all the tax registration applications required for your specific type and place of business.

Voluntary Disclosure: In states where business may have been conducted without registration and remittance of the sales tax due, the Voluntary Disclosure Agreement (VDA) offers an opportunity for a company to come current, agreeing to a limited look back period, while eliminating penalty and bringing your organization back into compliance. Meridian can help negotiate and establish a VDA with all applicable jurisdictions.

Taxability Matrices: Meridian provides matrix analysis to determine your company’s position and responsibility. We will analyze your operations to determine the taxability of various products and service offerings sold in each state and locality according to state specific laws and regulations. All areas will be mapped out in a matrix to improve your processes and procedures. Meridian can then assist in determining whether or not your firm is compliant in all relevant taxing jurisdictions that it should be if desired.

Research: Most companies are unique in one way or another and unfortunately the tax laws and regulations don’t always provide clear direction. If you find yourself in a position seeking clarity in how the tax laws may affect your company, but don’t have the professional staff or resources to do the work, then Meridian is available to perform the research for you. Meridian can also help you obtain anonymous rulings from a State Department of Taxation if your fact pattern is highly unconventional.

Exemption Certificates: Your Company is required by law to hold and maintain valid certificates for all non-taxable sales and purchases. Meridian’s experience and expertise can assist your firm in ensuring the proper certificates are on file. Meridian can also create imaged certificates for ease of audit and recording.