When prevention is the best medicine 

A subtle misclassification here. A legislative change there. And then, before you know it, you’re coughing up millions of dollars in sales tax overpayments. Our client, a large health care organization with operations throughout the country, was feeling these symptoms as they worked to determine taxability on large volumes of medical supplies purchased across various states.

One state might require sales tax on one bandage but provide an exemption for another that’s nearly identical except for an added drop of germicide. A different state might tax a cane used solely within hospital walls but exempt the same type of cane if it’s intended for a patient’s home use. Such subtle complexities can easily slip past vendors and, especially if an accounting system doesn’t provide enough visibility into sales tax, past the health care organization as well. Despite their best efforts, our client lost a significant amount in sales tax leakage each year.

They tried to stem the flow by working against the clock to apply for refunds on overpayments before statutes of limitation expired, but this manual method proved inefficient and costly. Realizing that the lost time and money diverted resources from their true work of caring for people’s health, the organization resolved to determine the root causes of overpayments and reduce them before they happened.