What Are Sales and Use Taxes?
Sales taxes are due when a consumer or company buys an item. As a consumer there is not much you can do about sales tax. But as a business there is a complex web of regulations that govern whether sales tax is actually due. This is very complex to manage and the implementation is generally full of mistakes. Or mis-interpretations.
What is USE tax?
Use tax is sales tax that you assess on behalf of your vendor. If you are in New York and buy from a Florida company they may not charge sales tax. But it is your responsibility to assess and pay this tax, that assessment and payment is use tax.
Why is overpayment of Sales and Use Taxes so common?
The problem with sales and use taxes is complexity. With 47 different states and hundreds of municipalities charging sales tax and no common system to unify them it is a full time job to stay on top of all of the changes. This makes it nearly impossible for most companies to keep up and manage their taxes effectively over time.
Whom is to blame for overpayments, did we make a mistake, did the government, did our vendors?
The answer is everybody and nobody. State and local taxes are convoluted, complicated and multilayered. To manage them perfectly requires specialized knowledge of the various types of taxes, the interactions, the layers, and the grey areas. Every situation is so different that getting SALT perfectly right is nearly impossible without dedicated expertise which are very expensive.
That is where FMCC comes in – we help you get the money back that you overpaid.