Jan 29, 2021

Posted by in Mortgage | Comments Off on All That’s Necessary to Understand About Property Owners May Qualify Tax Exemptions

All That’s Necessary to Understand About Property Owners May Qualify Tax Exemptions

Many entrepreneurs and business professionals understand how to start a business, but are soon ill-prepared to deal with the many requirements for managing the sales tax exemptions of a state. The proper administration of exempt sales is one of the most significant elements of ensuring a business is in compliance with state sales tax laws and regulations. Why is it so important for a business to administer exempt sales? Because if the transaction is not properly handled, the company could be on the hook for any and all assessed tax, penalty and interest levied by the Department of Revenue of a state; and that is an unexpected and expensive expense that any company can do without. Failure to obtain an exemption certificate from the customer, failure to have an accounting system that can bind the exempt sales invoice to the exemption certificate from the customer or failure to retain exemption certificates for the purpose of a state audit are all problems that can cause the State Department of Revenue to assess tax, penalty and interest against a company. Get More Information 
Has your company put in place the appropriate controls and procedures to administer a tax-exempt sale to a local non-profit group or government official who has stated that they are not required to pay tax on the products they want to buy? You may think that it must be true, or that it is better to go forward and exempt a sale from tax than to lose a good customer, since the customer is telling you that they are entitled to a sales tax exemption. You would, however, be incorrect and possibly create a serious liability for the company. States have very specific laws and regulations with regard to who is entitled to claim tax exemption and how to document those sales. In addition, many States, depending on the type of exemption claimed, restrict the products that may be purchased tax-exempt to specific categories. In many states, the undertaking is currently responsible for establishing whether the purchaser is entitled to a state-legislated exemption from sales tax. To avoid an assessment in a state sales tax audit, ensuring that a customer is qualified to make an exempt purchase and that the sales are properly documented is essential.