Manufacturing Matters: Sales Tax Risks and Opportunities

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.

Highlights

• What is nexus for sales tax purposes
• How can I determine if I have nexus in a state and a collection responsibility
• What approaches are available to identify and mitigate sales tax risk
• What sales/use tax exemptions are available that I may not be aware of
• What is a utility study and how it is helpful

Prerequisites

Basic understanding of the manufacturing industry.

Designed For

CPAs and financial professionals who work or have clients in manufacturing

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

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