Managing Sales and Use Tax Risk: Reviewing Nexus Activities, Procurement Processes and Policies to Minimize Exposure

An increasingly important challenge for corporate tax advisers and finance professionals is the task of proactively identifying and minimizing sales and use tax reporting and payment obligations. Conducting comprehensive reviews of a company’s policies, procedures and nexus activities is essential to managing sales and use tax risks.

As multiple states continue to expand interpretations of activities that trigger business taxpayer nexus, companies face increased exposure to new sales tax collection and remittance obligations. To manage that risk, corporate tax advisers must engage internal stakeholders in all stages of both the sales and procurement processes to ensure that all tax obligations are identified, and tax collected and remitted at the appropriate rates.

In addition to identifying sales tax obligations, multistate corporations must ensure that use tax registrations are current and that use tax accruals are kept current. Sales tax advisers often must maintain accurate sales and use tax reserves as part of the company’s financial reporting obligations. This becomes especially important to companies involved in merger or consolidation activities.

Listen as our experienced panel provides a thorough and practical guide to conducting a sales and use tax risk review, including nexus studies, procurement monitoring, and payable account maintenance.

1. Records and processes to examine in a sales and use tax compliance review
2. Nexus reviews to ensure that the company has identified potential areas of economic presence
3. Develop, automate and review a sales tax decision matrix, addressing the taxability of the Company’s purchases and sales
4. Intra-company questionnaires to discern problem areas
5. Use of prior year filings, previous audits and other documentations to determine sales and use tax risk
6. Develop audit best practices and protocol

The panel will discuss these and other important questions:

• Designing a policy and procedures review to discover and evaluate sales and use tax risk
• Evaluating state nexus standards and analyzing corporate activities in key states
• Monitoring sales and use tax payable accounts to ensure adequate controls are in place
• Implementing processes to verify that all registrations to accrue use taxes are current and accurate
• Reviewing a company’s procurement processes to identify hidden sales and use tax obligations

Learning Objectives

After completing this course, you will be able to:

• Discern best practices to incorporate in implementing a review process of company policies and procedures to identify and manage sales and use tax risk
• Recognize critical points in a company’s purchasing cycle to examine in a comprehensive sales and use tax risk review
• Identify steps to implement a multistate nexus review as a component of a sales and use tax risk management process

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ business or public firm experience at mid-level within the organization, preparing complex tax forms and schedules; supervisory authority over other preparers/accountants. Specific knowledge and understanding of strength and weaknesses of policy and procedure generating Sales and Use Tax risks.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.