State & Local Tax Consulting
We provide specialized state and local tax consulting services to small, midsized and large businesses, many of which already have well established and trusted tax advisory relationships. Our consulting services do not conflict with the existing relationships. Instead, we act as an additional resource to provide specialized expertise.
We have deep technical expertise and experience with minimizing the following state and local taxes:
Ohio imposes a state level sales tax, while each Ohio County (88 total) also levies an additional and separate sales tax. Furthermore, 45 states and the District of Columbia impose a sales tax, with approximately 32,000 different rates, across 7,000 different tax jurisdictions (e.g. state, county, city, etc.). Due to these complexities, collection, remittance and overall compliance can be overwhelming.
Ohio also taxes many services, and provides numerous exemptions and exclusions that are not commonly known to many business owners or tax professionals. Because we specialize in sales and use taxes, we can help you manage the compliance burden while minimizing your overall liability.
Below is a summary of the services we can provide to assist with your sales and use tax needs.
- Refund Studies: Have you overpaid sales tax to your vendors or Departments of Revenue during the past 3 to 4 years? The goal of a refund study is to determine if overpayments exist and recoup taxes that have been paid in error.
- Exemption Certificate Reviews: Do you have exemption certificates on file for all past and current customers? What procedures do you have in place to ensure proper documentation is obtained from all future customers? We can review your sales tax exemption certificates and processes to verify that all required exemption certificates are on file, complete and up-to-date.
- Manuals and Training: Who is making taxability decisions for your organization and what would happen if they left the company? We can help you develop a guide and documentation for the taxability of purchases or sales, tailored to your company’s specific industry, needs and requirements.
- Audit Representation: Are you currently under an audit? We can provide assistance from the pre-audit conference through the appeals process to help minimize sales and use tax assessments.
- Nexus Reviews: Are you filing sales tax returns in all states where sales representatives live or travel on a regular basis? Do you know what your potential sales tax exposure might be if a state required the business to charge, collect and remit sales tax for the past ten years? Failure to collect and remit sales and use tax can cost companies thousands to millions of dollars upon discovery by state and local taxing authorities. Due to increasing technology and improved communication between the various departments within a state, across different states and the IRS, states have become much more adept at identifying non-filers. A nexus review will assist your company in understanding where it has sales and use tax registration and collection requirements based on current and planned activities. It will also quantify past tax liabilities, which will help you make an informed business decision regarding tax compliance.
- Voluntary Disclosure Agreements: Are you aware of historic tax exposure and wish there was a way to “come clean” and pay the tax while minimizing penalty and interest? Many states offer voluntary disclosure agreement programs which will minimize or eliminate past tax obligations and potential penalties. As your representative JPM will anonymously contact states on your behalf and negotiate to obtain the most favorable possible agreement terms.
In 2005 Ohio implemented its most significant tax reform in over 40 years. As part of the tax reform, Ohio introduced the low-rate, broad-based Commercial Activity Tax (CAT) on business gross receipts. We have followed the CAT from the time it was introduced into the Ohio legislature, up through its current implementation. We have a thorough understanding of the law and the Department of Taxation’s guidance, policy and audit techniques.
Whether you are an Ohio based company, or an out of state business, we can help you understand the CAT and assist with reducing your liability with a variety of services, including:
- Refund reviews
- Filing and registration requirements
- Taxable and excluded entities
- Filing options and elections
- Nexus standards
- Taxable and excluded gross receipts
- Sourcing (Ohio vs. non-Ohio gross receipts)
- Other tax reduction strategies (e.g. deductions, credits, etc.)
There are over 500 municipalities in Ohio that impose an income tax on most business entities and/or business owners. Businesses that operate in multiple cities and states face an increasingly difficult burden to comply with complex and constantly changing laws and regulations.
We can assist your business in complying with these tax laws and regulations, while minimizing your overall tax liability through the following services:
- Refund Review: Are you confident you have not overpaid your taxes in the past 3 to 4 years? We can review previously-filed state and local tax returns to identify refund opportunities.
- Review of Business Structure: Could a different business structure reduce your taxes? We can review your company’s current operational and organizational structure to ensure optimal structure.
- Filing Methodology Reviews: Many cities and states permit (or require) affiliated companies to file income tax returns on a unitary, combined, or consolidated basis. The rules regarding permissive and required filing methodologies can be complicated but we can assist your company in analyzing the optimal filing methodology.
- Review of allocation and apportionment factors: This review involves determining whether apportionment factor strategies are available to reduce the amount of income or tax base subjected to tax. We can help reduce your tax base with efficient planning and our knowledge of the various state and municipal apportionment formulas.
- Audit Representation: Are you or your business being audited for income of franchise taxes? Many issues can trigger state tax audits. Early communication is a critical component to successful audit resolution. JPM can assist your company in gathering and responding to information requests, communicating with state auditors, providing analysis of audit schedules and work papers, negotiating assessment items and liability, and representing your company through administrative level appeals.
- Nexus Studies: Are you filing income or franchise tax returns in all cities and states that your employees live or visit on a regular basis? We can assist your company with determining the jurisdictions in which your company may have filing obligations and the liability associated with such obligations.
- Voluntary Disclosure Agreements: Are you aware of historic tax exposure and wish there was a way to “come clean” and pay the tax while minimizing penalty and interest? Many cities and states offer voluntary disclosure agreement programs which will minimize or eliminate past tax obligations and potential penalties. As your representative JPM will anonymously contact states on your behalf and negotiate to obtain the most favorable possible agreement terms.
There is significant competition among state and local communities to attract and retain businesses and jobs. This competition has created a significant increase in business tax credits and incentives. Many credits and incentives can only be obtained through negotiated offers, while other credits and incentives are statutorily available (negotiation is not required).
We can help your company identify, quantify and negotiate the most favorable credits and incentives package possible. We can also help you ensure that you are maximizing the benefit available from statutory credits and incentives.
In addition to reviewing state tax returns for tax credit opportunities that may still be available, we can help identify, negotiate and secure incentives related to:
- Screening current employees and new hires for employment tax credits
- Construction of a new facility
- Expansion of an existing facility
- Consolidation of facilities
- Capital expenditures associated with job creation and/or job retention
- Training employees
- Analyzing tax credit or incentive packages offered by competing state or local tax jurisdictions.
- Evaluating your company’s status in meeting a state’s recurring compliance requirements
Buried in the cost of fuel are various federal and state taxes. Our firm has a deep technical knowledge and understanding of these tax laws, including those that provide various exemptions and allowances which are often overlooked. JPM can help identify opportunities to recoup refunds of prior year tax payments and also minimize tax liabilities in the future.