RETAIL
TAX COMPLIANCE
Industry Challenges
With
multiple pressures from industry consolidation to changing
consumer buying behavior, retailers must change the way
they do business today to maintain market share. Increasing
competition has resulted in competitive overlap in some
retail sectors, adding to the complexity of meeting customer
needs. Consumers have more shopping choices available,
intensifying pressure on retailers, as profitability becomes
more challenging. As a result, retailers are looking at
ways to operate more efficiently while still providing
products and services that will appeal to the consumer.
These market forces are driving retailers to better manage
their internal costs to maximize profitability. Many retailers
see an opportunity to reduce general administrative expenses
in the area of “non-core” activities. By outsourcing these
activities, retailers can have their finance teams focused
on more strategic projects that affect the bottom line.
Sales & Use Tax Compliance Challenges
A
key opportunity exists in the administrative effort required
to properly manage state and local sales taxes. The complexity
of the current sales and use tax system, along with the
retailer’s responsibility for collection of large amounts
of sales tax, creates significant compliance requirements.
Here is a sample of the issues your team may be facing:
Sales and use tax returns must be filed in every state
for all locations and outlets.
- Need to find ways to reduce your tax liabilities
to help improve profitability.
- POS systems may have different tax rates, which causes
an over-under tax comparison analysis.
- Access to IT resources to update internal systems are
scarce or unavailable
- Due to many locations throughout the US, it is hard
to keep up with each jurisdiction’s notices and correspondence.
- Doing use tax compliance is time-consuming and complex
Our Compliance Service
Tax Partners Managed Services relies on a data management
approach to the process of sales & use tax compliance.
TRACS™, with its data and workflow management tools,
is the cornerstone of our service. Our retail clients
benefit from a comprehensive service that includes all
facets of the compliance process. The following gives
a high-level overview of the inputs into our service:
We take data feeds from all of your disparate systems,
clean the data and translate it into TRACS™. From there,
our experienced client services use highly defined processes
to calculate your tax liability and prepare funds requests
to remit payments to the jurisdictions. During the process,
you can access web-based management reports and an image
library to help prepare you for any audits.
The presence of an established, tested and continuously
improving business process, with TRACS™ as a key component,
creates several distinct benefits for the retailer:
- A proven business model for complex sales & use
tax with location reporting – We have the
system (TRACS™) that gives you access to the best technology
to manage the compliance process, so you don’t have
to obtain IT resources to improve an internal system.
With this technology and solid processes used across
many industries, we lower the risk of an unsuccessful
outsource for you.
- Scalability and flexibility to evolve long
term with retailers – We have the ability
to manage many data feeds from disparate systems, such
as POS systems and ERP systems, use data translators
to get data in the right place within TRACS™, and produce
accurate returns and web reports by location or outlet
to give you more control over the process with less
risk.
- Economies of Scale & Skill – The
complexity inherent in a retailer’s tax compliance situation
and the technical, constantly changing environment of
sales and use tax rates, rules and statutes mandates
that your compliance process have:
- High levels of production capability and process
efficiency
- Domain expertise (in both sales/use tax in general
and high production sales/use tax compliance and
reporting.)
Tax Partners Managed Services has the system (TRACS™),
the engineered processes, the compliance throughput volume,
the domain expertise and experience to serve a retailer’s
breadth and depth of needs.
Why Tax Partners Managed Services?
Companies like Rhodes Furniture, Cingular Wireless,
Liz Claiborne and others have decided that
outsourcing sales and use tax compliance to
us makes sense. In doing so, they’ve tapped
into our flexible data management model that
builds on our highly developed processes. With
integrated cash management and web access to
sales tax and audit information, we give our
clients the control they need, while we do
the administrative work of compliance. Our
clients also get peace of mind, knowing that
we have the experience and expertise to get
the compliance process done right!
Our end-to-end compliance service provides a way for retailers
to shed risk, keep their people focused on what’s most important
and gain control over their tax and accounting processes.
Want to learn more about how the Retail Tax Compliance
Service is a smart choice to help you stay ahead of the
pack? Email us at salesanduse.tax@thomson.com and
we'll have an Account Executive follow up with you.
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SUCCESS STORY
“Dedicate Internal Resources or Outsource?”
This large home furnishings provider was experiencing several
problems with proper calculation and filing of sales
tax. With almost 100 store locations, they wanted to
maintain accurate tax rates while keeping a lean finance
function focused on core activities like planning and
financial reporting. And they wanted easy access to historical
information for the sales tax audit process. Their dilemma
was whether or not to continue dedicating internal resources,
or look to outsource this non-core activity.
After analyzing it’s accounting and finance functions,
this retailer chose Tax Partners Managed Services to handle
the compliance process. In addition, we compute the monthly
tax liability for each store location, looking to identify
tax rate issues in the POS system. To make the audit process
more effective, a web accessible image library is available
for their needs. By outsourcing the compliance process
with Tax Partners Managed Services, the finance team can
now focus on core financial projects that will bring results
to the bottom line.
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