There are 3 primary areas in which hidden sales tax exposure is frequently identified for AvaTax users. Once we obtain administrative access to the Company’s AvaTax console, we:
(1) review the tax codes to ensure the Company’s product item codes are mapped to the appropriate AvaTax Software Codes;
(2) review the nexus states in which the Company collects sales tax to ensure they are collecting the appropriate tax type, and are turned on only in states in which the Company is registered for sales tax, and;
(3) review the return settings in AvaTax, to ensure the Company is filing the appropriate tax forms with the appropriate filing frequency.
These three items are the critical steps in the use and management of AvaTax, as they determine the products and states in which sales tax will be calculated and the filing calendar by which the sales tax returns will be filed. To the extent we identify any issues or areas of concern, we will bring this to the Company’s attention.
We even log into the state tax portals to ensure there are no outstanding notices. This step is critical to ensure that we are in good standing, particularly at the outset of the managed return engagement. We ensure that all state tax portal logins are updated and will create a shared portal login file for the Company’s reference and our use with respect to the Managed Return Services.
