Sales & Use Tax Recovery Services

Especially during these trying times, companies look at cost savings to improve their bottom line and increase cash flow. A Sales & Use Tax Refund Review (also called “Sales Tax Recovery” or a “Sales Tax Reverse Audit”) is a cost-savings exercise to ensure you are only paying your fair share and not leaving any dollars on the table. A refund review will give you peace of mind, improve your bottom line and increase cash flow without any upfront costs.

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The TaxMatrix 5-Point Value Sales Tax Recovery Proposition Includes:

  1. Review Accounts Payable Data over a 3-4 year period of Fixed Asset and Expense Purchases.
  2. File refunds directly with the State and/or Vendors.
  3. Receive refunds whereby our only billable event is shared savings; we operate on a success basis with no upfront fees or costs.
  4. Provide a free Custom Tax Workshop to share our findings, so the client can mitigate future overpayments and keep those dollars in-house.
  5. Avail our free Tax Help Desk to answer ad hoc sales and use tax questions.

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About Our Sales Tax Recovery & Reverse Audit Services

For over 20 years, TaxMatrix has assisted companies with recovering tax and improving efficiencies. A dynamic environment drives non-compliance whereby companies should view tax recovery as a best practice:

  • Audit or limited-time post-paid assessment
  • Past audit netted refund, so “friendly overpaying” may not come under audit
  • Substantial purchasing in a particular state under statute
  • 3 years of available statute and have not been under audit
  • Recent expansion, acquisition or operation closure under statute
  • Change in tax accounting procedures (SAP implementation, centralized, A/P turnover, etc.)

Our granular approach to sales & use tax recovery begins by breaking down a client’s business into dozens of operating cost centers – across many industries and states – to ensure the client capitalizes on all applicable sales tax exemptions. Here are some of the most prevalent exemption opportunities we identify while performing a tax recovery:

Our Sales Tax Recovery Process

A reverse sales tax audit project can take place anytime, typically after quarter-end or outside of federal tax duties. Unlike an internal audit with a set deliverable, there is no crystal ball to dictate what a sales & use recovery effort might yield. There are many factors at play (state, industry type, growth, changes in purchasing), so a consultation is needed to see if a recovery project is a viable exercise. As such, our service is designed to be unobtrusive to your daily operations with a success-based fee structure that equates to “our time, our dime.” Unlike the Big 4 and with no set deliverable, we perform the heavy lifting by way of invoice review, data gathering, vendor support, scheduling, filing and attending any state meetings to maximize a refund claim.

  1. The scope is determined: we can review 3-4 years of historical purchasing.
  2. Data exchange determined (on/offsite, 3rd Party) to minimize obtrusion to Client.
  3. Review A/P information for fixed assets and expenses, along with use tax accruals.
  4. TaxMatrix would need a cost center listing, chart of accounts and general ledger data as part of the review.
  5. If the Client is Manufacturing or Pharmaceutical, it may be prudent to visit the production facility in question. Also, if sales tax is paid on utilities used in production, a predominant use or utility exemption study may be needed.
  6. Post-review discussion to clarify usage and invoice tagging.
  7. Exemption opportunities (i.e. overpaid/over-accrued sales & use tax) are determined.
  8. An internal schedule of findings with hyperlinks to suspect invoices and transactional breakdown is provided to the client.
  9. The client approves Refund Claim(s) and assigns a limited POA (Power of Attorney) to move forward.
  10. TaxMatrix works in concert with vendors for backup data.
  11. Refund claims are perfected and filed accordingly with the state and/or vendor.
  12. We handle all of the leg work with state administrative processes, as well as vendor claims to maximize refund potential. 
  13. Our service is generally performed on a success basis, so the only billable event is after the Client receives refunds based on our service. If TaxMatrix does not recover dollars, there is no fee.
  14. We offer a complimentary Custom Tax Workshop to share all of our findings so that improvements can be made.
  15. TaxMatrix avails a Tax Help Desk for Clients to receive real-time ad hoc support for sales & use tax questions.

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Industries We Work With

TaxMatrix consults with clients for both single-state and multi-state reviews. We also work with a wide range of industries on not only tax recovery engagements, but audit defense, which is also performed on a success basis. Below is a list of industries we frequently service:

Oil & Gas/EnergyService

Our team looks forward to partnering with you to support your company’s cost savings objectives. If you are interested in learning about our reverse sales tax audit service, reach out today.

Sales & Use Tax Recovery FAQs

We work in the area of “grays” because sales tax case law is ambiguous. Our approach is comprehensive and we will only file something if we believe we can substantiate the position based on our interpretation of the law. We share everything with the Client prior to filing, so if there is anything the Client feels we should not file, it is removed.

Dependent on the State, there may be some options to file directly with the vendor, and in some cases, either or both. We work with vendors for support data to solidify our case, even in filing with the state. Every state works a little differently, but we handle every step of the process.

Dependent on the number of invoices and data access, an onsite review typically takes 1 week, while offsite/remote access can take longer. It usually takes 3 months from the time the engagement letter is signed to gather and review the data, and then schedule the opportunity for Client approval. In many cases, if we find a material opportunity with a particular claim, we will return for a follow-up review to capture those dollars as well.

We typically come across exposures, and those will be pointed out right away at no charge. Since we are compensated on a success basis, we are reviewing for refunds, but can also perform an exposure review. In most cases, companies tend to pay the tax – better to have refunds than deal with possible penalty/interest issues if under audit.

It depends on the state and the filing entity. Thus, if refunds are filed directly with a vendor, the chances of coming under audit are greatly minimized. Some states have different divisions to handle audits versus refunds. Keep in mind that the state can only audit to the statute as well, so if a major expansion was completed and close to losing the statute, it is up to the taxpayer to file for a refund before those dollars are lost forever. Lastly, with any engagement, it is up to the Client if we file. There have been cases where the amount was too small to file, and other cases where the amount was so large that it made sense to file regardless. Every scenario is different.

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Additional Services

Are you looking for additional sales tax services? TaxMatrix also provides Sales Tax Audit Defense and Utility Exemption services for businesses like yours!