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19 Ways to Help Your Company Grow in a Challenging Economy
It’s important to communicate up front with the audit team before the inspection
begins. Knowing their expectations and relaying your capabilities can mean all
the difference. If your record-keeping systems don’t allow certain levels of detail,
share that up front. In the end, a positive verdict from the audit team may mean
you’re actually overpaying sales and use taxes. If they don’t find any transactions in
which they question whether you paid the taxes that were due, you may have been
too generous and need to reassess your tracking of sales and use tax payments.
Once you determine that you have overpaid sales and use taxes, the laws in the
state in which the taxes were paid determine how you go about getting a refund.
One route is to go through the vendor to whom the company paid the taxes and seek
the refund. However, the vendor may be unwilling or unable to refund the tax for
various reasons. First, the vendor gains no benefit from returning taxes that it may
believe were legally collected. Second, it may have to then apply to the state for
its own refund if it has already paid the taxes. Lastly, because of the complexities
of sales and use tax laws, the vendor may not be in a position to determine if taxes
are even due to be refunded.
Another route is to appeal directly to the state for a refund. However, the best
approach is always not to pay sales and use taxes unnecessarily in the first place. By
working with a knowledgeable and skilled partner, companies can identify savings
on a real-time basis and put their cash to work for them, rather than allowing it to
sit in the state coffers.