Securing almost $9 million in sales tax refunds
Multinational agricultural products company
A multinational agricultural products company felt it was overpaying sales taxes and filed a refund claim for $900,000 with the state of Iowa. Iowa disputed the claim and responded with a reduced refund amount of $700,000.
The company wanted help supporting its refund claim and securing its refund. It also hoped to identify other refund opportunities.
RSM started by working with a single business unit at the company to analyze and support its disputed refund claim. We then worked with the company to understand its operations in other business units, to uncover additional refund opportunities, and to help it avoid making overpayments in the future.
We discovered that a combination of high volume (the company had more than 10,000 transactions a week in Iowa alone) and an incomplete understanding of exemptions and sales and use tax planning opportunities within the food industry meant that the company was routinely overpaying sales taxes. We worked with them to secure appropriate refunds and to adjust their sales and use practices going forward.
Because our team had deep experience not only with the specific issues involved in the initial refund request, but also with the refund and protest process, we were able to present our client's case clearly. As a result, Iowa increased the final refund from $700,000 to $850,000. But that $150,000 increase was just the beginning of the tax savings. We helped the company identify additional refunds of $3.1 million, $1.2 million and $3.5 million for an additional $7.8 million in tax savings—almost $9 million in total.
The refunds represent only part of the value, however. By working with the company's staff to improve their understanding of sales and use tax planning opportunities, we've helped them improve their practices to avoid future overpayments, which will save the company millions of dollars going forward.
This company now routinely contacts RSM for advice not only on sales and use taxes, but on a wide variety of tax issues.