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US Indirect Tax Services
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Unlike direct taxes such as income tax or corporate tax that taxpayers pay directly to the government, consumers pay indirect taxes when they buy goods and services. Intermediaries such as retailers collect indirect taxes from consumers who bear the tax’s ultimate economic burden. Sales tax, value added tax (VAT), and goods and services tax (GST) are examples of indirect taxes that are applied to the sale of goods and services.
- Impact of the US Supreme Court decision in Wayfair
- Refund recovery services
- Indirect tax audit controversy
- Indirect tax compliance services
- Indirect tax process review
Deloitte Tax’s Multistate Tax Services group has a team of indirect tax professionals across its network of member firms specializing in indirect tax services. Drawing upon our in-depth knowledge of each jurisdiction’s tax laws, coupled with data analytics and other technology-based services, we offer distinct insights regarding how these laws apply to companies nationwide, in various industries. Our professionals represent a mix of accounting, legal, industry, technology and state government backgrounds. Deloitte’s indirect tax professionals have significant experience performing refund reviews; providing audit defense and appeal services; advising regarding nexus, sourcing, classification, and taxability questions; and submitting voluntary disclosure agreements (VDAs) in jurisdictions nationwide.
Impact of the US Supreme Court decision in Wayfair
If your company is not currently filing sales and use tax returns in all jurisdictions where you have sales, the outcome of Wayfair may impact your company! Wayfair potentially increases the complexity of complying with sales and use tax laws and, more than ever, companies need to consider proactive tax planning measures for the changing path ahead. Through a combination of tax advisory services, insight, experience, and technology, Deloitte can help your company understand its current posture, reveal the potential impacts, and make recommendations in order to meet compliance obligations.
Deloitte’s indirect tax specialists can assist with the analysis of processes and technology, help plan and execute your next steps, and monitor future state tax law and regulatory changes.
Refund recovery services
In our experience, indirect tax overpayment errors may occur on up to 10% of a company’s overall spend, exists across all types of industries, and should be of particular focus for companies with annual expenditures in the hundreds of millions of dollars.
Deloitte Tax has both national and local resources dedicated to indirect tax refund reviews. To help companies quantify potential indirect tax refund opportunities, we review their purchases for potential errors relative to the application of sales, use, telecommunications, excise, severance, and other transaction-based taxes. We use smart optical character recognition (OCR), cognitive technology and machine learning, and data analytics to efficiently identify, recover, and reduce overpaid indirect taxes in high-volume, complex transactional data environments. By leveraging technology in our refund reviews, Deloitte Tax can review large populations of transactions, even those that otherwise would not rise to the materiality necessary for a manual review.
In addition to identifying, preparing, and filing refund claims, Deloitte Tax also has substantial experience communicating with vendors and jurisdictions to confirm that they review filed claims. Maintaining open channels of communication is key to the recovery of overpaid taxes. Deloitte Tax will also recommend process improvements and provide training to reduce future overpayments.
Indirect tax audit controversy
Many of our Deloitte Tax indirect tax specialists have past experiences as former employees of state departments of revenue. Our professionals have insight into tax law and administrative audit policies, as well as industry knowledge. We also assist companies with indirect tax managed audits. Managed audits allow the taxpayer to perform the tax audit in conjunction with the state within guidelines laid out by the state’s tax auditors. Many states abate or reduce interest and/or penalties associated with a managed audit assessment.
Indirect tax compliance services
Value to your company
Whether preparing 40 returns per month or 400, indirect tax compliance can consume a significant amount of your company’s limited indirect tax resources. Indirect tax (including sales/use, gross receipts, and transaction taxes) and the associated compliance is an increasingly important task as states seek to expand registration, notice and reporting requirements. Our solution frees up time that could be instead focused on more valuable tasks such as refund/ exposure reviews, audit defense, exemption certificate compliance, taxability research, or G/L account reconciliations.
Whether it is dealing with the consolidation of multiple data sources, manually preparing returns, populating reports to aid in general ledger account reconciliation, or handling jurisdictional notices, indirect tax compliance is often a time consuming and tedious process. Inaccurate compliance may result in significant penalties and interest, overlooked refund opportunities, an increase in tax notices, and the potential for financial reporting issues.
Our approach and methodology
Deloitte leverages leading technology tools and processes in the delivery of indirect tax compliance co-source services.
Our approach is focused on:
- Adopting a methodology that addresses your company’s objectives
- Efficiently transitioning your company’s current tax preparation obligations
- Providing returns timely for your review and approval
- Providing feedback on discovered data or tax compliance issues
- Providing reports in the requisite format, including reconciling tax source data to tax payments
- Addressing indirect tax notices in a timely manner and providing notice status via a notice tracker
We leverage our Deloitte Online technology to provide electronic copies of returns for the company’s review and approval.
Indirect tax process review
Our experienced indirect tax specialists can perform an in-depth review of your overall sales and use tax function to provide observations regarding the effectiveness of sales and use tax processes, identify potential exposure areas, share our knowledge regarding leading practices, and provide recommendations for improvement.
Deloitte assistance in the area of excise tax extends to both compliance and consulting services. Our excise tax professionals help companies identify, analyze, and quantify potential tax refunds. Through our ongoing professional relationships with the IRS,TTB and the taxation authorities in most states, Deloitte Tax can get to the root of complex issues quickly and often resolve issues more efficiently than if a company sought to address the audit or controversy solely on its own.
Our severance tax professionals help companies identify, analyze, and quantify potential oil and gas and other mineral severance tax refunds. Through the use of our proprietary technology, Deloitte has the capability to address a client’s severance tax needs and evolving compliance requirements. Deloitte's assistance in the area of severance tax extends to both compliance outsourcing and compliance support services. Many of our severance tax professionals have significant experience with state departments of revenue and have insight into tax law and administrative auditor policies, as well as in-depth industry knowledge.