Use Tax Accrual, Validation, and Compliance: Managing Systems, Addressing Risks, Audits

Tax professionals at many companies--big and small--might admit their use tax accrual procedures are not what they should be. This can become a dangerous vulnerability at a time when financially stressed state and local governments regard business use tax compliance as low-hanging fruit for audits.

States that charge sales tax also charge use tax and are increasing audits to enforce compliance and collect consumer use tax. Companies buying goods out of state or online must report and remit consumer use tax for the storage, use, or other consumption of property that was not subject to sales tax. The same applies when a business withdraws goods from inventory for its own use.

Companies are responsible for assessing the accrual of use taxes and remitting payments to the state and/or local tax authority. Determining the accrual of use taxes can be difficult due to swiftly evolving state laws in areas such as software-as-a-service delivery, digital assets, and new state nexus laws. Businesses involved with numerous sales for resale or purchases from remote vendors with no physical presence in their states must diligently manage the use tax accrual process at the proper tax rates.

Listen as our panel reviews common exposures in use tax accrual and offers general approaches to improvement that will benefit companies in multiple industries.

1. Staff policies and procedures concerning use tax accrual
2. Improved interactions with systems
3. Leveraging tools such as direct pay permits
4. Special issues with use tax accruals for particular industries due to evolving state tax law

The panel will explore these and other relevant topics:

• Tracking use tax and setting policies and procedures for them
• Implementing more effective procedures to work with AP and GL systems on use tax accrual
• Structuring a better approach with vendor tax validation
• Leveraging tools such as direct pay permits

Learning Objectives

After completing this course, you will be able to:

• Ascertain methods in tracking use tax and setting policies and procedures for them
• Identify key issues and effective procedures to work with AP and GL systems on use tax accrual
• Ascertain methods for better vendor tax validation
• Identify special issues with use tax accruals for particular industries
• Understand the impact of evolving state tax law changes on use tax accrual

• 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 state sales and use tax on products, goods and services affecting multistate companies.

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.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).