Overview
Sales tax is especially important to consider for
manufacturers. On the sales side, a manufacturer must be aware of which
states they need to register to collect sales tax, know the taxability of their
product, maintain exemption certificates and develop a system to apply the
correct tax rate on sales. The cost to mitigate risk is much less than the
cost of being caught on a state sales/use tax audit or the reduction to sales
price in due diligence. Manufacturers must also be aware of the up-front
exemptions that apply to the purchases. Often these exemptions are missed, and
refund opportunities are available. Utility studies must be considered to
determine the percentage of exempt use for production.
Learning Objectives
·
Understand
Nexus for sales tax purposes
·
Determine
if you have nexus in a state and a collection
responsibility
·
Learn what
approaches are available to identify and mitigate sales tax
risk