Sales Tax
Accounting Firm Introduces Use Tax Compliance System
Crowe Horwath LLP, one of the largest public accounting and consulting firms in the U.S., has introduced the Crowe Use Tax Simplifier, a tool that facilitates the use tax verification process.
Mar. 02, 2015
Most Americans have a firm grasp on the concept of “sales tax,” but how familiar are they with “use tax?”
Although most commonly associated with goods that businesses purchase for their use in operations, use taxes can also be implemented on consumers, particularly those who purchase items online and are not charged their state’s sales taxes during the transaction. Use taxes are assessed by a state or local government on taxable purchases regardless of where the purchase took place.
Use tax compliance can be a time-consuming and inefficient process and, if done incorrectly, can cost thousands of dollars in unpaid taxes, penalties and interest. To help businesses with use tax compliance obligations, Crowe Horwath LLP, one of the largest public accounting and consulting firms in the U.S., has introduced the Crowe Use Tax Simplifier, a tool that facilitates the use tax verification process.
The Crowe Use Tax Simplifier applies customized criteria to purchase data to make efficient, standardized and fully documented use tax decisions. The data used is available in a company’s enterprise resource planning (ERP) system. The solution can be configured to work with any type of ERP system, and was designed to work for a variety of industries including retail, construction, financial institutions, for-profit healthcare and manufacturing and distribution.
According to Mike Cantrell, a director in the state and local tax (SALT) group at Crowe, use tax processes vary greatly from one business to another. “Some companies have limited or no use tax decision-making processes in place; they simply pay whatever tax is charged by vendors and hope they’ll be okay if they get audited. Other organizations have more robust use tax processes in place, but often these are manual and very time consuming,” he said.
“The Crowe Use Tax Simplifier was designed specifically to address use tax decision making,” added Will Ault, a director in the SALT group at Crowe. “It was created for companies that need to have efficient processes and standardization with respect to their use tax analytics, but cannot justify the costs or operating requirements associated with the solutions currently available.“
The Crowe Use Tax Simplifier:
- Provides a use tax automation solution at a fraction of the cost of other specialized applications;
- Identifies valuable tax underpayments;
- Helps mitigate the risk of costly surprise assessments of use taxes, penalties and interest;
- Increases staff efficiency by decreasing monthly use tax compliance time;
- Reduces or eliminates manual use tax review processes; and
- Saves professional fees arising from refund recoveries and tax audit defense.