Business gains, audit pains
5 surprising tax risks faced by growing businesses
Growing businesses face a common conundrum: the very acts that help them grow may also put them at risk. Systems and operations may not be able to adapt to new directions. Details may be overlooked in the complex matrix of developing and executing on strategic plans. And sales or transactional tax is a detail that is easy to get wrong when a company is in flux. There are numerous variables at play when determining your sales tax collection and remittance responsibilities and they may not always be clear as plans are put in place. Minor oversights in sales tax rate changes or additional sales tax nexus can make your business a target for a sales tax audit.
In this article, Avalara discusses five actions that many growing businesses take, and which can cause tax risks if not properly reviewed and managed.
- Expanding into new jurisdictions
- Using contract workers
- Introducing new products or services
- Expanding routes to market
- Growing in general
Whether you are about to implement a strategic growth plan or are knee deep in change, taking the time to address potential sales tax audit risks now can alleviate future headaches and keep more of your growth dollars on the bottom line.
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