For businesses that operate in more than one state, keeping on top of sales and use taxes can be daunting. And it’s evident compliance is only growing more complex: for example, more than a dozen states are taking steps to impose taxes on online retailers or “remote sellers,” part of an effort to persuade Congress to push through national legislation in this area, a recent Wall Street Journal article found.
According to the report: “(The) states are tired of waiting for Congress to write national rules to let them collect sales taxes from out-of-state Internet retailers. So, in a loosely coordinated effort, they are moving to impose those taxes themselves and daring merchants to challenge them.”
The stakes are high: the National Conference of State Legislatures, citing a University of Tennessee study, says states collectively lost $23.3 billion in 2012 because of the different tax treatment of brick-and-mortar businesses versus online-only retailers, although other estimates vary.
In many ways, CPA firms are better positioned than ever to provide clients guidance and support in this area. CPA mobility laws have increased the ability of accounting professionals to practice in multiple states. And merger and acquisition activity in the profession has created new CPA firms with multistate footprints and multistate expertise.
There’s also an X factor in establishing an advisory practice for sales and use tax compliance: technology. The knowledge base for tracking legislative and regulatory developments in tax jurisdictions around the country is something that needs to be curated by a highly trained staff. That’s virtually impossible for all but the biggest CPA firms to replicate, and it explains why specialized cloud solutions that deliver this kind of continuously updated information are an important differentiator for trusted business advisor services.
To learn more about sales and use tax advisory services from the firm perspective, join CPA.com President and CEO Erik Asgeirsson and a panel of experts for a Digital CPA Webcast “Sales and Use Tax: What Your Firm Needs to Know” on May 26.