Companies whose businesses span multiple states will find that state and local taxes (SALT) can represent a bewildering array of regulations that may periodically result in expensive audits and penalties. In many cases, their accounting resources are too limited to stay current on SALT-related issues, or to take advantage of tax refund opportunities before statute periods expire.
There are a number of advisory services available that specialize in SALT-related services. All of the Big Four and the mid-tier accounting firms provide SALT services (here are sample links for SALT services at KPMG and Grant Thornton), as well as a number of specialty firms, such as The SALT Group, Alvarez & Marshal, and Ryan & Company. Grant Thornton also issues a SALT Alert newsletter and posts copies on its website, which can be accessed at the above link.
One of the key services provided by these firms is the reverse sales and use tax audit. This involves a review of a company’s accounts payable records, capital expenditures, and sales and use tax returns. If the SALT firm finds a tax overpayment or error, it completes refund documentation and submits it to the appropriate government on behalf of the company. This service can also include an analysis of record keeping and tax filing practices and procedures, long-term SALT planning, and representation of the company at administrative hearings.
However, the reverse audit is by no means the extent of the services they provide. All of the above firms have branched out into numerous SALT-related services for other taxes, such as:
- Payroll and unemployment taxes, especially in relation to refunds associated with mergers, acquisitions, or reorganizations.
- Property taxes, which includes an analysis of property assessments, exemptions, abatements, asset tracking, and the unbundling of equipment purchases.
- State unemployment insurance taxes, involving planning for tax rate increases, voluntary contributions, and tax rate verifications.
- Unclaimed property, involving identifying and minimizing the amount of unclaimed property to be remitted to state governments.
These firms also have relocation and expansion planning services, where they assist in identifying SALT-related savings during corporate relocations or facility consolidations.