Sales tax compliance isn’t what it used to be—thanks to the Wayfair ruling and a maze of state-specific tax laws, it’s now a bit like playing a game where the rules keep changing. For businesses of all sizes, this can feel overwhelming. That’s where a seasoned sales tax consultant can be a game-changer.
Miles Consulting is ready to help you navigate the maze, as we’ve done for so many of our clients. But the proof is in the pudding, as they say. So, here are some real-world examples of how we’ve helped our wonderful clients master their sales tax obligations.
Here’s what you can read about:
- Case Study 1: Small Retail Business Manages a Sales Tax Audit
- Background: Challenges faced by a security products manufacturer during a California state audit.
- How We Helped: Use of a Managed Audit Program (MAP) to mitigate penalties and interest.
- Results: Avoidance of penalties and significant cost savings, leading to full compliance.
- Case Study 2: Mid-Sized Manufacturing Company Successfully Navigates Sales Tax Challenges
- Background: Risks identified during a due diligence process for a company planning to sell its business.
- How We Helped Implementation of best practices to address, retroactive liabilities, reduce exposure and come into compliance.
- Results: Reduction of audit-related stress, mitigation of financial impact, and successful sale.
- Case Study 3: E-Commerce Business Tackles Multi-State Sales Tax Compliance
- Background: A SaaS company discovers unreported sales tax liabilities in multiple states.
- How We Helped : Multi-state compliance strategy including VDAs and tax software implementation.
- Results: Remediation of sales tax exposure, penalty avoidance, and streamlined compliance processes.
- Common Themes Across Success Stories
- Cost Savings: Significant financial improvements through expert intervention.
- Penalty Avoidance: Effective strategies to navigate complex tax landscapes and avoid penalties.
- Improved Compliance Processes: Sustainable compliance achieved through expert advice and technology.
Want to know how we can help you? Let’s talk. Reach out to us at info@milesconsultinggroup.com.
1. Case Study 1: Small Retail Business Overcomes Sales Tax Audit
Background
Our client, a well-established manufacturer and distributor of home security products based in the Midwest found themselves under scrutiny by the state of California. Despite their long-standing presence in the market, recent growth had exposed them to new sales tax obligations that they were unprepared to meet. The changes in economic nexus* brought about by the 2018 Wayfair ruling had left them non-compliant in several states, leading to a challenging audit by the California Department of Tax and Fee Administration (CDTFA).
*For a comprehensive guide to sales tax nexus reviews, read this article we wrote.
How We Helped
Faced with the daunting prospect of a state audit outside their home state, the company turned to our team of sales tax experts for help. Leveraging our deep knowledge of both California specific laws and administrative remedies, we guided the company through the audit process. A key strategy was enrolling the company in a Managed Audit Program (MAP), a special initiative that allowed for a reduction in penalties and even interest. Not every business qualifies for a MAP, but our technical expertise enabled us to manage the audit so effectively that the CDTFA agreed to the reduced interest, significantly lowering the company’s financial burden.
Results
The outcome was a huge success. Not only did the company avoid hefty penalties, but they also achieved substantial cost savings through the reduction of interest. Today, they are fully compliant in California and have implemented new processes to ensure they remain compliant in other states as well.
2. Case Study 2: Mid-Sized Manufacturing Company Successfully Navigates Sales Tax Challenges
Background
Donna, the owner of a family-owned manufacturing company, found herself facing a daunting challenge as she prepared to sell her business. While her company shipped products across the United States, she was unaware that this expansion had created significant sales tax obligations in multiple states. As Donna worked with the potential buyers during the due diligence process for the sale, it became evident that the company had sales tax exposure that could potentially derail the transaction or lead to substantial financial liabilities.
“I found out that I wasn’t aware of or compliant with the State Sales Tax laws while trying to sell my company. After consulting with Monika and her team, I understood that I had reached nexus in 27 states. I knew this was not something I was prepared to navigate alone and needed to get in compliance, preparing and filing VDAs and Back Returns, so that I could move forward in selling my company.”
How We Helped
Understanding the urgency of the situation, our team at Miles Consulting Group stepped in to manage the audit process and guide the company through the complex landscape of multi-state sales tax compliance. We implemented a comprehensive strategy that included the preparation and filing of Voluntary Disclosure Agreements (VDAs) and retroactive filings across the 27 states where her company had nexus. This proactive approach not only addressed the immediate audit concerns but also laid the groundwork for improved compliance going forward.
“Having 27 states to tackle, the team was incredibly organized and communicated with me each step along the way. They made my very large problem seem manageable and assured me that we would tackle it all,” said Donna.
In addition to managing the VDAs and back returns, we also assisted the company with its monthly returns and filings, ensuring that all obligations were met until the sale of her company was finalized.
Results
Donna and her company were able to successfully navigate the sales tax challenges that had threatened the sale of her business. “Now that Miles Consulting has helped me resolve my sales tax issues, I was able to close on the sale of my company,” Donna remarked. The audit-related stress was significantly reduced, and the financial impact was mitigated through accurate tax filings. She also noted, “Without any hesitation, I highly recommend hiring the team at Miles Consulting Group. Navigating the process of filing VDAs, back returns, and getting compliant with our sales tax filings was just not something I had time to take on while trying to simultaneously run the day-to-day and sell my business.”
This case study highlights not only the expertise of our team but also the personal connection we build with our clients. “The attention and effort they put into helping me was above and beyond. Not only were they true professionals with every interaction, but I felt like I was working alongside friends. They truly cared about helping me get my issues resolved.”
3. Case Study 3: E-Commerce Business Tackles Multi-State Sales Tax Compliance
Background
Our third case study involves a SaaS company. The company serves a diverse customer base that includes both large enterprises and smaller businesses, even individuals, who may purchase their software online with a credit card. While their home state does not tax SaaS revenue streams, they were unaware that their operations in other states had created significant sales tax liabilities. It wasn’t until their financial auditors conducted an annual review that the issue of unreported sales tax liabilities came to light.
How We Helped
To address this complex challenge, we employed a multi-state compliance strategy that involved engaging in a nexus and taxability review to identify the company’s sales tax exposure across the United States. Our approach to mitigate their liabilities included both Voluntary Disclosure Agreements (VDAs) and the registration and retroactive filing of sales tax returns in over 15 states. This proactive strategy not only brought the company into compliance but also helped them avoid over $100,000 of penalties.
We also worked closely with the company’s team to implement sales tax software, ensuring that their revenue streams were properly coded and that they could manage their monthly and quarterly filings independently. Despite this newfound autonomy, we continue to consult with the company regularly to address any emerging issues.
The client recently remarked “It’s great having the Miles team as a partner to be able to rely on their sales tax expertise. They give us answers and documentation support in a way that we’re able to digest it, and it enables us to assess risk and get comfortable around our sales tax compliance.”
Results
The benefits of this intervention were substantial. The company was able to remediate all prior exposure using VDAs, which reduced lookback periods and negated penalties. They now enjoy enhanced compliance across multiple states and have streamlined their tax processes, leading to a more efficient and effective approach to sales tax management.
4. Common Themes Across Success Stories
Cost Savings
One of the most consistent outcomes across these case studies is the significant cost savings achieved through expert intervention. Whether through penalty reductions, interest savings, or the reduction of taxes due to proper application of state tax laws (which, of course, vary by state) , these businesses were able to improve their financial standing and reinvest those savings back into their operations.
Penalty Avoidance
Another key theme is the effective strategies employed to avoid penalties. By engaging early with the right expertise, these companies were able to navigate complex tax landscapes, ensuring that they remained compliant and avoided the costly repercussions of non-compliance. Penalties can often be as high as 20% of the tax liability. Being able to reduce or eliminate those by working with a professional such as Miles Consulting can be very significant, and generally more than pays for the cost of our assistance.
Improved Compliance Processes
Finally, all three case studies demonstrate the importance of sustainable compliance processes. Through a combination of expert advice, technology implementation, and ongoing support, these businesses are now better equipped to manage their sales tax obligations, reducing the risk of future issues.
The value of hiring the right sales tax consultant is undeniable, as evidenced by these real-life success stories. Whether you’re a mid-sized company, or a large enterprise, the right expertise can make all the difference in navigating the complexities of sales tax compliance. We’re so proud of the relationships that we forge as we help our clients navigate these waters!
At Miles Consulting, we’re here to help you achieve compliance and peace of mind. Book a consultation, drop us a line, or send us an email at info@milesconsultinggroup.com
