I Serving Clients
New & Growing
New markets, products or services
raise taxability and nexus issues as well as collection requirements.
It is essential that new businesses
understand their Sales & Use Tax collection and payment requirements early on. New businesses
can avoid potentially devastating problems by knowing which of their products and services are
taxable, and which business activities today, or with growth in the future, will trigger nexus in
additional states. Having this knowledge allows businesses to set up sound compliance procedures
Knowing what can trigger nexus is
important because sufficient nexus allows states to require a business to collect tax on the
state's behalf. Many businesses do not realize that a permanent presence in a state is not the only
circumstance that may trigger a requirement to collect Sales Tax. This puts an additional
compliance burden on the business. Left undiscovered, Sales & Use Tax exposure in other states
will continue to grow and compound with interest, penalties and potential personal
It's important to remember that paying
Sales Tax is the customer's responsibility with the business acting as the state's custodian. If
businesses fail to collect the appropriate tax from their customers, the tax becomes their
For growing businesses, Sales &
Use Tax problems often build over time. Businesses start selling in just one state without having
any physical presence in other states. They have a revenue and business focus, so facing Sales
& Use Tax issues is often left for "later" or for the accountant to handle. See our
Expanding your business into
additional states often accompanies growth. Sales force and marketing expansion, Internet sales,
wider delivery of goods or services, attendance at trade shows, employees residing in other states,
and other such activities can trigger nexus. Adding new products, services and different types of
customers further complicates the situation. New taxability issues may be either unfamiliar or
completely unknown to you and further compound the undiscovered tax liability exposure previously
Most states can look back to day one
of operations when auditing a business that has never filed a Sales Tax return.
If planning to grow their business and
sell or go public, smart business owners start with the end in mind. They will stay focused on the
fact that the business will eventually go under the microscope during a Due Diligence Review from
the potential buyer's or underwriter's financial advisors. One purpose of the Due Diligence Review
is to protect the purchaser from hidden liabilities through discovery. Should hidden liabilities be
uncovered, the result will typically be a lower selling price or higher required escrow amount.
Proactive owners can ensure a favorable Due Diligence Review by addressing Sales & Use Tax
issues from day one. Read more on this in the Mergers & Acquisitions section.
Whether your business is just starting
out or is long-established, Sales Tax Colorado' professionals can help. We assist with the
taxability determinations to establish what's taxable and what can be classified as exempt.
Client's call on us to handle nexus reviews to determine in what states there may be an obligation
to collect and remit. We also develop procedures for proper compliance including handling resale
certificate and collecting the correct amount of Sales Tax. Some clients need help determining
which automated compliance software or systems are best for them. Outsourcing some or all of the
compliance process is another big decision about which we provide informed input.
At Sales Tax Colorado we serve
businesses that want to keep their competitive edge by navigating the ambiguous, constantly
changing, and highly intricate maze of Sales & Use Tax regulations.
Clearly, it's best to get your
business in order early. If that hasn't happened, we can still help. Contact us today for a no-obligation consultation
to discuss your situation and the potential remedies.