Outsourcing sales tax service or outsourcing sales departments is to be one of the most important fundamental tasks that a small, medium, or big business must-have. To perform or outsource to be able to get the job done when it comes to sale tax. In general, this is why most business still does outsource the sales tax services and it continues to be the fastest-growing part of the business. So, first of all, let's learn about some of the terms that will give clarity around. I'm referring to the person service provider or firm that's going to be performing the work. When I say company or business, I'm referring to the legal entity in which that accountant will be ultimately performing the work for and the outcome of their work. Such as financial statements would be in representation of that entity and if I say the word client or customer. Specifically talking about maybe an employee, a representative, or the business owner itself of that company or business that the accountant doing work for.
What does an outsourced sales tax service mean?
First of all, let's define it based on how the work is going to be performed and what exactly is the work going to be done. Now I'd like to group sale tax services in general or outsourcing tax services into two types. The firm potentially performed one is what I like to call collaborative, while the other one is the non-collaborative. Both has the same goal, to manage your sales tax and/or tax return.
What's the difference between collaborative and non-collaborative sales tax services?
Collaborative is when the accounting system is accessible by both parties. While the non-collaborative is the opposite or when the outsourced sale tax service has complete control over the data of the accounting system, in other words, the client cannot pull any reports or add any information into that accounting system, usually has zero access to the accounting system.
The following are some of the services that can be outsourced:
- Return Preparation and Filing is the process of preparing tax returns, tax preparation may be done by the taxpayer with or without the help of tax preparation software and online services.
- Exemption Certificate Management is a management of a business or organization to attest that you are a tax-exempt entity, or that you are purchasing an item with the intent to use it in a way that has been deemed exempt from tax. In other words, sales tax exemption certificates are your proof that you can buy an item tax-free.
- Voluntary Disclosures & Amnesty, the voluntary disclosures is a process to correct a tax return you previously filed or to file a return that you should have filed. While the tax amnesty is a limited-time opportunity for a specified group of taxpayers to pay a defined amount, in exchange for forgiveness of a tax liability relating to a previous tax period or periods and without fear of criminal prosecution.
- Sales Tax Nexus Determination is to describe a situation in which a business has a "nexus" or tax presence in a particular state or states. If a taxpayer has nexus in a particular state, the taxpayer must pay and collect/pay sales taxes in that state and pay income tax on income generated in that state.
- Product and Service Taxability is a tax on products and services sold domestically or to other countries for the consumer.
- Sales Tax Audit Support is a process of sales tax support when a state agency inspects the books and records of a company specifically evaluating the correctness of sales tax paid on invoices and use tax accrued on invoices.
There might be more services for sales tax and returns, let me know down the comment section below and I will update this article. The additional suggestion will be credited to you. Hopefully I was be able to helpful in regard to "Outsourcing Sales Tax Service".
