Unlock consumer use tax strategies in our white paper

Did you know that incorrect management of consumer use tax leads to millions of dollars in losses annually for businesses? Consumer use tax management is a critical aspect of financial responsibility for businesses across the United States yet many companies over-pay (or under-pay) their consumer use tax obligations.  

Understanding consumer use tax is essential for navigating regulation complexities and ensuring compliance. Shifts in local sales tax rates in certain regions have led to significant increases, altering states' average sales tax rates. These fluctuations don't just affect numbers on paper; they influence consumer behaviour, prompting individuals to explore options across borders or turn to online shopping. What’s more, the lingering impact of the COVID-19 pandemic on tax revenue, combined with economic slowdowns and soaring inflation rates, creates uncertainties about future tax collections.

The pitfalls of neglecting consumer use tax, addressing prioritisation and a skills gap

While your business may be diligent about calculating and remitting sales tax, too often consumer use tax is given a lower priority. This can lead to paying either too much or too little in taxes, resulting in fines and a negative impact on your business reputation.

Figuring out if something is subject to consumer use tax involves looking at an extensive list of factors: from the type of purchase and applicable exemptions through to temporary location exemptions, and tax-exempt usage. Events like moving assets or using inventory for non-sale purposes also need a close look to assess tax liability. It is crucial for your business to make sure they're not overpaying or underpaying consumer use tax.

Consumer use tax requires a structured approach, businesses need to understand the:  

• Factors driving changes in consumer use tax regulation
• Difficulties businesses meet when manually determining consumer use tax, from extensive evaluation criteria to limited invoice information

Yet, the responsibility for deciding whether bought items are taxable falls on the purchasing or accounting department. This can be challenging due to a lack of information on invoices and limited knowledge about taxes.

“Given the complexities of the tax laws and the multitude of items most companies purchase and use in different ways, the only feasible way to handle the requirements of consumer use tax is through automation.”

Joseph Geiger, Jr., ESQ, CPA, MST, MSA, manager of tax consulting, Vertex Consulting Group

The benefits of consumer use tax services and automation are multiple and include increased accuracy, streamlined audits, and decreased administrative burdens. Consumer use tax services and tax automation software also helps companies avoid penalties and interest for incorrect reporting. What’s more by showing a commitment to tax compliance, companies can navigate audits more smoothly and reduce administrative burdens.  

The Vertex white paper - Are you overpaying (or underpaying) consumer use tax? Automation and improved control can save your company a fortune - offers valuable insight into the challenges of consumer use tax management and how tax automation software can help.  

Find out more about streamlined consumer use tax management

Read the white paper to learn more.

Vertex Consulting’s Joe Geiger navigates the complexities of consumer use tax, shedding light on common pitfalls and offering invaluable advice. Discover why automation is key and gain insights into tricky tax determination scenarios like direct pay permits and evaluated receipts settlement (ERS).  

• What is consumer use tax? The differences between seller's use tax and consumer use tax
• The consequences for companies that overlook consumer use tax
• Why consumer use tax services and tax automation software are important.

By embracing automated solutions, businesses can take control of their consumer use tax obligations and optimise their tax management processes for long-term success.

Don't let your company fall victim to overpayments or penalties—take control of your tax obligations today.

Vertex is a global provider of indirect tax solutions that offers customisable software applications to help businesses in transacting, complying, and growing confidently. Vertex consumer use tax services and tax automation software supports businesses worldwide in managing the complexity of consumer use tax regulation.  

Work with Vertex Consulting Group to achieve accurate tax calculations and minimise financial risks.