Sales & Use Tax
Grant McCarthy Group offers a variety of sales and use tax services to assist clients with multi-state sales/use tax matters ranging from typical nexus issues to complex transactional issues. Our sales and use tax team is comprised of a diverse group of professionals with significant subject matter expertise derived from over 20 years of public accounting, governmental and in-house experience. Our unique blend of technical knowledge, practical experience, longstanding relationships with state tax auditors and knowledge of sales/use tax reporting systems allows us to provide comprehensive sales/use tax assistance to our clients.
As in other service areas, our clients are regularly encountering more sophisticated and aggressive sales and use tax auditors. To assist our clients in successfully managing and resolving audits in a timely and efficient manner, we work closely with our clients to:
- Understand and assess the issues under examination;
- Quantify exposures and other risks;
- Respond to the auditor’s inquiries;
- Identify offsetting tax saving opportunities; and
- Negotiate with the auditors to achieve favorable resolutions.
We also work closely with the taxing authorities to ensure that audit issues are properly defined and to see that the audits progress in a timely manner.
Reverse Sales and Use Tax Audits
Grant McCarthy Group performs reverse sales and use tax audits to identify, quantify, and document opportunities for refunds of sales and use taxes with respect to payments made to a client’s vendors and to taxing jurisdictions.
Our reverse sales and use tax audit is performed in the following manner:
We review the client’s accounts payable and sales and use tax reporting systems to determine an efficient method to quantify, document and obtain refunds. Targeted tests of such systems are performed, sample data is retrieved and validated, interviews with accounts payable, purchasing and other personnel are conducted and recently completed and on-going sales/use tax audits are reviewed. The results of our efforts are summarized and potential refund opportunities are identified and quantified.
Quantification and Documentation – We refine our review to focus upon significant transactions identified by our initial scoping efforts. Cost/benefit analyses are performed giving consideration to transactions providing the greatest opportunity for refund and to methodologies that are the least intrusive to client personnel. An agreement is reached with the client as to the validity of the refunds identified, the estimated amount of such refunds and the refunds to pursue.
Refund Filing and Verification – Refund claims are prepared for review and filing. Once refund claims are filed, we work with the taxing authorities to the extent that verification of any item included in the refund claim is requested and to ensure that refunds are secured.
Post Audit Recommendations – We prepare a detailed post-audit report and recommend corrective measures to improve the accuracy of future filings. Our report will also identify easily implementable process and system improvements.
Transactional, Structural and Other Business-Related Issues
Sales and use tax implications may be overlooked when companies decide to sell a portion of their business, acquire or merge with another company, change their corporate structure or enter new markets. Grant McCarthy Group provides advice to clients engaged in acquiring or disposing of assets or entering new markets, including advice as to the availability of exemptions from tax, nexus and bulk sales requirements. We also review our clients’ corporate structure, product flow and proposed restructuring plans to minimize sales and use tax liability and exposure. In this regard, we assist our clients in:
- Determining the sales and use tax consequences of proposed transactions and changes to the company’s corporate structure;
- Making nexus determinations and requesting formal or informal guidance from state/local taxing authorities;
- Reviewing applicable exemptions and other filing issues;
- Drafting and negotiating voluntary disclosure agreements;
- Implementing changes to corporate structures;
- Determining on-going filing responsibilities; and
- Registering in appropriate jurisdictions.
Tax Process Transformation Services
With the wide use of Enterprises Resource Software by large corporations, it is imperative that the supply chain and customer billing processes account for key transaction tax information to optimize the accuracy of tax filings.
In this regard, our Transaction Tax Transformation services include:
- Reviewing existing supply chain and customer billing business processes;
- Reviewing existing Master Data Designs and Master Data Governance guidelines;
- Recommending and implementing new supply chain and customer billing processes to more effectively manage the transaction tax accrual and reporting processes;
- Recommending and implementing Transaction Tax Systems with the client’s ERP systems to streamline the process; and
- Providing best practices for transaction tax processes and systems.
General Technical Assistance
We regularly provide clients with technical assistance in all areas of state and local tax and are available to answer day-to-day questions.