If your trucking organization is trying to find methods to boost income flow, you may wish to make most state sales tax exemptions and refund opportunities. Tax payments can total up to sizable expenses, and curbing that which you owe can keep more cash in your business. For trucking operations, you will find two ways you can cut into your state tax bills: claiming fuel excise tax exemptions and performing a slow sales tax audit.
Gasoline excise tax exemption could mean a tax refund.
Previously, gasoline obtained for these activities was qualified to receive a gasoline excise tax refund. However, if your company chose to apply for the rebate, the state then required that income tax be paid on the purchase. The break-even point must be determined to determine the advantage of claiming the refund since the excise tax was predicated on volume, and the sales tax was based on the purchase price of the fuel. That is an issue that the MTA has been fighting to improve for years. It had been instrumental in persuading the state legislature to grasp this approval finally fully.
The new law enables companies to file the claims for the rimborso accise and never having to pay sales tax subsequently. An example could be if your company operates ten trucks, and each APU or reefer unit used 1,000 gallons of diesel each year; this new rule would put one more $2,850 in your pocket (1,000 x $0.285 per gallon x 10).
Opposite revenue duty audit stops duty overpayment.
State difficult authorities usually audit trucking organizations for underpayment of revenue and use taxes. If you have ever been struck with a retroactive duty statement, you realize that it can take a toll on your cash flow. But turnabout is fair play: There is any such thing as a slow sales tax audit (reverse audit), and it will be the actual opposite. An opposite audit helps your company identify sales tax overpayments you might have made so you can claim back that which you erroneously paid to the government. The state (or several states) may owe you a refund
.What sort of reverse audit helps you get your money back
Tax laws are complicated. Your best span of action is to engage a qualified firm with reverse sales tax audit experience to help you make sense of what the law states and root out overpayments. A slow sales tax audit is completed in three phases:
Identifying and estimating potential refunds
Validating and submitting overpayment claims
Remedying the overpayment causes
Phase one — Feasibility study
The very first phase is a feasibility study to spot and estimate the potential sales and use tax refund opportunities. It will take about a day to review your fixed asset listing, chart of accounts, and accounts payable activity and invoices for many periods within the statute of limitations. This is three-and-a-half years. The sales tax professional performing the reverse sales tax audit can estimate your potential refund from this review.
Phase two — Validation
If an overpayment is identified in the feasibility phase, the primary focus is to compile the documentation required to prepare and submit the refund claim for the state's review. This often involves meeting with the business personnel most familiar with the things purchased, such as, for instance, plant supervisors or buyers, to help significantly provide descriptions for the items being claimed. Summary explanations are often required if the exemption's reason is not evident to the state's claim reviewer. In the last step of phase two, the whole refund claim package is presented to the business for review and approval.
Phase three — Implementation
Once the refund claim has been submitted to the state, the state representative may have questions and request copies of invoices. Phase three includes answering the state's requests and ensuring the refund is issued to and received by your company. It is essential to supply company personnel training and make sure an activity can recapture the exemptions that triggered the retroactive refunds.