New Year, New Sales Tax Laws – Stay up to Date with this Simple Tip
- The Weekly Spiff!
- Posted by AxioMobile
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By Marilou C. Vroman, CPA, CFE
As the year end approaches, we get wrapped up in the holidays and strive for strong year-end sales performance and profitability. While we focus on a strong finish, it’s also a great time to focus on clean and compliant beginnings and make sure our dealerships up to speed with regulatory changes coming in the new year.
One hot spot for many dealers is sales tax compliance. States tend to focus on dealers as they are a great source of tax revenue and are at risk of non-compliance, whether it’s use tax on purchases, tax on policy repairs or substantiating sales tax exemptions. Sales tax audits are common for some dealers and it can be very costly if amounts remitted to the state fall short of an auditor’s estimate.
From personal experience, many auditors react positively to good faith efforts to be compliant, at least when it comes to tax penalties. One simple step that can be taken to show good faith is to designate a key employee to sign up for sales tax notifications from the state. In the State of Florida for example, dealership employees can sign up for “Tax Tips” or “Tax Information Publications” to be sent via email to stay up to date the latest tax changes.
A few months ago, we were informed of a change in tax on commercial rental properties, where the rate will be decreased from 5.8% to 5.7%, starting January 1st, 2019. Today we received notification Broward County is adding 1% county tax and the new tax rate will be 7%, also starting January 1st, 2019. These changes will likely impact many dealers in the new year. Is someone on your team ensuring your DMS sales tax settings and payment terms are up to date?
Take a moment to ensure sales tax and other regulatory communications are making their way to your stores to proactively make necessary changes. For Florida tax tips, go to http://floridarevenue.com/Pages/subscribe.aspx. In other states, check your State’s website for similar services or make it a point to visit the website each month for news and updates.