Protect your company from a sales tax liability
When purchasing from new vendors, have you considered asking:
“Do you charge sales tax on all taxable purchases in every jurisdiction our organization resides?
This simple question, and response from your vendor, helps to identify potential sales tax liability issues before they become a real problem. When a vendor acknowledges they collect sales tax, you have a reasonable expectation that the invoice you receive from your vendor includes sales tax. While this by no means is bulletproof, it is a step in the right direction in collecting the proper documentation to protect your company from a sales tax liability.
In some cases, vendors, for a host of reasons, choose to not deal with the hassle of multi-jurisdictional sales tax. This, in turn, put the responsibility onto them and YOU as the customer. If a vendor is not taxing a product or service appropriately, this could lead your company to significant tax exposure over time. This is why it’s always important to discuss with your vendor how they handle sales tax.
It’s also important to remember that products and services are taxed according to each jurisdictions laws.
At the end of the day, the government wants its money and will involve you and your vendor to collect it.
If you think your business may be impacted by your vendors, reach out to one of our Modas consultants who will help you better understand how sales tax could impact your business if not collected properly.