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Empowering the sales & use tax department

USA
16 Apr 2015

The U.S. economy is constantly fluctuating, which makes for an ever-changing landscape in corporate America. Taxand USA discusses keeping up with corporate changes.

Corporate changes typically result in tax compliance obligations in new jurisdictions, attrition in the tax department, data migration issues and legacy system constraints, all of which indirectly impact the business operating units. Taking the time to ensure the sales tax team plays an integral part in changes in corporate plans can have a substantial impact on the company’s future by helping to mitigate potential future sales tax risk.

The last thing a business operating unit wants to see is an assessment of millions of dollars in sales and use taxes several years after a project is long complete. In most cases, this may be a result of the tax department being excluded from the project discussions, which can in turn have an adverse effect on accurate budgeting. Typically, most company operations and planning personnel will not appreciate the need for understanding and analysing the granular level of sales and purchasing detail as well as the sales and use tax department.

The sales and use tax team typically has first-hand knowledge of sales and purchasing trends and can be of great value to the company if consulted prior to initiating major changes in business operations. Whether it’s allowing the tax department to review tax clauses in major purchase agreements or giving the tax department an opportunity to opine on potential sales transactions and/or capital spend activity, most companies forget or take for granted that they have an in-house tax consulting shop readily available to assist the business operations with enhancing their financial planning.

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Your Taxand contact for further queries is: 

Craig Beaty
T. +1 713 221 3933
E. cbeaty@alvarezandmarsal.com

Andy Chapman
T. +1 713 547 3684
E. echapman@alvarezandmarsal.com

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Taxand's Take

It is important for a company to recognise the benefits of empowering the sales and use tax department when future plans for changes in business operations are being made. As we all know, every state has its own set of tax laws when it comes to transaction taxes. A company’s own in-house tax experts are the best resource to consult with business operations personnel about the potential tax impacts of business changes that can drive future tax savings.

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