Today's Technology for Tomorrow's Firm.
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30 February 2016 • www.CPAPracticeAdvisor.com A YEAR IN THE LIFE: SALT ACCOUNTANT Confrm with your clients all of the states where they are doing business. Be prepared to ex plain ho w t he t e r m " doi n g b u s i ne s s" relates to each client and the type of work t hat t hey do. T h is requ i res some knowledge of how each state defnes "doing business." You don't have to have this information at your f inger tips. Obv iously you shou ld know the rules for the state(s) where you have your ow n of f ice(s), and your neighboring states as well, but beyond that, it's okay to tel l your c l ient t h at you h ave to do some research if the client announces that some type of business is being con- ducted in a state you haven't worked with in the past. K now the nexus rules for each state where your client is doing b u s i n e s s . N e x u s d e t e r m i n e s whether your client has enough of a connection to the state to have to pay ta xes there. Nex us r ules have changed in recent years, so if your knowledge is dated, make sure you get up-to-date with the rules for each state. Inquire as to the frequency of your client's business within dif- ferent states. Sometimes occasional and one-time sales constitute doing business in a state, and other times they do not. Once again, it's in your interest to learn the specifc laws of t he states where you r cl ients a re conducting business transactions. Determine the income subject to ta x i n each state where you r client is doing business. Each state is ent it led to create its ow n laws regarding taxability of various items, so k now ing the rules in your ow n state doesn't mean you automati- c a l l y u nder s t a nd how item s a re ta xed elsewhere. Not only do you need to know the laws for what types of items are subject to tax, but also y ou ne e d t o k no w w h a t c on s t i - t utes a sa le w it h i n t he state. For some states, the state from which you ma ke t he sa le has t he ta x ing authorit y, for other states, it's the st ate to wh ich you a re sh ippi ng. Sales tax rules and income tax rules don't a lways go hand-in-hand, so make sure you check for both. Determine ta x deadlines and c re ate a ye a r-lon g sc hedu le to make sure all deadlines are met. W hether it's income tax, payroll tax, sales tax, or property tax, make sure you know all the deadline require- ments. Seting up a schedule for the year will help you and your client be proactive about preparing for and meeting deadlines. Consider credits and incentives in each state where your client is doing or might do business. Many states ofer a variety of incentives to atract and retain business. If your client is already doing business in a state or is consider i ng lau nch i ng new operations, make sure you are aware of available incentives. Designate a registered agent in each st ate w here you r cl ient is doing business. Taxing authorities require every company with nexus in a state to have a registered agent in that state. T is is the person or entity that has been designated to receive legal notifcations on behalf of the business. February in the SALT Practice: Client Meetings By Gail Perry, CPA, Editor-in-Chief I t's February and you're in the heart of busy season. Starting a new process for orga- nizing and monitoring state and local tax chores and obligations is really not fea- sible at this point in time, but there are some best practices you can employ that will help you make sure you're approaching this complicated area of taxation in the most efective way possible.