The Training Manufacturers Need in the Post-Wayfair World
Articles have been written on the impact of the South Dakota v. Wayfair case and how manufacturers face increased sales tax collection responsibilities, but it is important to understand the less obvious effects beyond collecting and remitting tax burden.
One of the biggest challenges manufacturers face is making accurate tax decisions on purchases. For many manufacturers, the tax decision (i.e. whether or not tax gets paid on a purchase) rests with the AP department. Invoices come in and get paid – often with minimal understanding of sales tax laws and manufacturing exemptions. Not paying tax on a purchase often occurs because the supplier did not charge tax, not because of a full understanding of the exemptions available to manufacturers. Tax decisions are often made out of luck – not out of wisdom.
But what’s the impact in the post-Wayfair world? Suddenly, companies that have never charged tax, will now include tax on their invoices. Does the staff processing these invoices understand the sales tax laws in the state and the manufacturing exemptions? Do they know what is actually being purchased and if it qualifies for exemption?
What is the strategy for communicating exemptions to suppliers? Somebody will need to provide them with an exemption certificate. This process will be more important than ever.
In this post-Wayfair world, having a process in place and training key employees will be more important than ever. Cherry Bekaert’s sales and use tax team has training options to accommodate your needs. Whether it is part of reverse audit, a complete assessment review, or a training webinar, anticipate the upcoming challenges your company is going to face to ensure smooth sailing.