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19 Ways to Help Your Company Grow in a Challenging Economy
chapter 1
Don’t Overpay Sales
and Use Taxes
One important way that your business can save money is one that is often
overlooked — saving on your sales and use taxes. Sales and use taxes may seem
insignificant, especially on small purchases or items paid for with petty cash, but
it’s important to remember that sales and use tax payments for businesses are
typically double the amount you’ll pay for corporate income taxes. Clearly, this
represents an area for savings that is far too large to ignore.
This being the case, why don’t more companies take advantage of the savings
to be found in not overpaying sales and use taxes? Quite simply, they don’t have
the resources, whether it’s assigning personnel to track how taxes are paid, having
automated systems in place to track payments, or understanding what taxes are due
and what taxes can be refunded. Add in the fact that sales and use taxes typically are
paid on every purchase the company makes, and a company can quickly find itself
combing through thousands of transactions to uncover a tiny amount of potential
savings per transaction. Still, the cumulative impact of these many small savings
can be substantial.
It’s easy to consume valuable company resources assigning and training
employees to track sales and use tax, develop tracking systems, and learn the ins
and outs of the tax codes in all 50 states. A better approach is to work with an expert
tax professional who is skilled in identifying these savings and who can implement
systems quickly and efficiently. Working with an external partner is even more
vital if a company hasn’t been tracking sales and use tax payments over the course
of the budget year and now wishes to retroactively identify their true tax liability
and potential savings. When facing a deadline, it’s a daunting prospect to review a
mountain of months-old records to look for hidden treasure. At these times, it’s even